Problem 6. See the figure below. If the government decides to restrict the quantity that is sold to 100: 6.1. How much of the good will be sold at that price? 6.2. What is the demand and supply price at that quota? 6.3. What is the quota rent in this market? Who gets the quota rent?
Problem 6. See the figure below. If the government decides to restrict the quantity that is sold to 100: 6.1. How much of the good will be sold at that price? 6.2. What is the demand and supply price at that quota? 6.3. What is the quota rent in this market? Who gets the quota rent?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Quota is a government-imposed restriction which limits the number of goods that can be traded during a particular period.
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