Quotas often:
A)result in the elimination of incentives to engage in illegal activities.
B)lead to deadweight losses.
C)lead to efficient market outcomes.
D)are necessary to increase the quantity of the goods in the market.

Question

Quizplus · Accepted Answer

Quotas often lead to deadweight losses, as they restrict the quantity of goods that can be produced and sold in the market. This can result in a decrease in consumer surplus and producer surplus, leading to an overall decrease in social welfare. While quotas may be put in place to achieve various goals, such as protecting domestic industries or managing resources, they often have negative consequences for market outcomes.

Quotas Often