Suppose that Canada auctioned off all import quotas,the auctions were perfectly competitive,and the government received the revenues from the auction.In this case,the deadweight loss from a quota would be _____ the deadweight loss from an equivalent tariff.

Question

Quizplus · Accepted Answer

When the government auctions off import quotas and receives the revenues, the deadweight loss from a quota is equal to the deadweight loss from an equivalent tariff because both mechanisms restrict imports to the same level and the government captures the economic rent.

Suppose That Canada Auctioned Off All Import Quotas,the Auctions Were