Quota rents are:
A) the extra return to quota license holders following imposition of a quota.
B) the extra return to land that occurs following imposition of a quota.
C) the difference between imports with no quota and imports with the quota.
D) the extra payment to labor that occurs following imposition of a quota.

Question

Quizplus · Accepted Answer

Quota rents refer to the extra return received by quota license holders due to the imposition of a quota, as they obtain the exclusive right to sell the limited supply of quota-restricted goods. Other market participants may be willing to pay a premium for the right to participate in the restricted market, which generates profits for the license holders.

Quota Rents Are