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When the Government Imposes a Quota on Sales of a Good

Question 132

Multiple Choice

When the government imposes a quota on sales of a good or service,it usually licenses the right to sell a given quantity of the good.The market price of the licence is equal to the:


A) demand price of the good.
B) wedge that represents the difference between the demand price and the supply price.
C) supply price of the good.
D) equilibrium price of the good.

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