Which of the following is true of quotas?
A) Unlike tariffs, it reduces the domestic price level of the good on which the quota is imposed.
B) It forces domestic producers to improve productive e?ciency.
C) It is a source of tax revenue for the domestic government.
D) It makes goods more expensive for domestic consumers.

Question

Quizplus · Accepted Answer

Quotas limit the quantity of goods that can be imported, reducing the supply of the imported goods. This limitation can lead to higher prices for those goods in the domestic market, as the reduced supply can lead to increased demand for the limited available goods, making them more expensive for domestic consumers.

Which of the Following Is True of Quotas