Imposing a quota on the import of a good is preferable to a tariff because a tariff creates a deadweight loss while a quota does not.

Name: Imposing a quota on the import of a good is preferable to a tariff because a tariff creates a deadweight loss while a quota does not.
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Question

​Imposing a quota on the import of a good is preferable to a tariff because a tariff creates a deadweight loss while a quota does not.

Quizplus · Accepted Answer

Both tariffs and quotas can create deadweight losses by reducing the quantity of trade. A quota restricts the quantity directly, while a tariff does so by increasing the price, both leading to inefficiencies in the market.

​Imposing a Quota on the Import of a Good Is

Imposing a Quota on the Import of a Good Is