A quota on imported avocadoes ______________ the price of avocadoes,_____________ consumers' surplus for avocado buyers,_______________ producers' surplus of avocado growers and __________________ tariff revenue.Because the loss to _____________ is more than the gain to ___________________,there is a net loss to society.
A) raises; increases; decreases; generates; producers; consumers and government
B) lowers; increases; decreases; does not generate; producers; consumers
C) raises; increases; decreases; does not generate;consumers; producers and importers
D) raises; decreases; increases; generates; consumers; producers and government

Question

Quizplus · Accepted Answer

A quota on imported avocadoes would raise the price of avocadoes due to limited supply. This would increase the revenue of domestic avocado growers and in turn decrease the surplus of avocado buyers. However, there would be no tariff revenue generated as it is a quota-based restriction rather than a tariff. The loss to consumers, who pay more for the same quantity of avocadoes, is more than the gain to domestic producers and importers. Therefore, there is a net loss to society.

A Quota on Imported Avocadoes ______________ the Price of Avocadoes,_____________

A Quota on Imported Avocadoes __ the Price of Avocadoes,_