What will a tariff and an import quota do to the quantity of imports and the domestic price
A)increase the quantity of imports and raise domestic price
B)increase the quantity of imports and lower domestic price
C)reduce the quantity of imports and raise domestic price
D)reduce the quantity of imports and lower domestic price

Question

Quizplus · Accepted Answer

A tariff and an import quota are both tools used to limit the quantity of imports. A tariff is a tax imposed on imported goods, making them more expensive and less attractive to consumers, while an import quota is a limit on the amount of a particular product that can be imported. Both of these measures would result in a reduction in the quantity of imports. Additionally, because these measures make imports less attractive, domestic suppliers can charge higher prices, resulting in a rise in domestic prices. Therefore, option C - reduce the quantity of imports and raise domestic prices - is the correct answer.

What Will a Tariff and an Import Quota Do to the Quantity