Assume that a VER (voluntary export restraint) is imposed on an imported product. The difference between the domestic price and the world price is captured by:

Question

Quizplus · Accepted Answer

Under a VER, foreign exporters agree to limit the quantity of exports, which raises the price of the product in the importing country. The difference between the higher domestic price and the world price is captured by the foreign exporters as they can sell fewer units at a higher price.

Assume That a VER (Voluntary Export Restraint) Is Imposed on an Imported