if-a-country-imposes-an-import-quota-instead-of-a-tariff-what-is-the-likely-effe

Question

If a country imposes an import quota instead of a tariff, what is the likely effect on domestic prices and producer surplus?

Accepted Answer

Domestic prices increase and producer surplus increases.

Answer

Domestic prices decrease and producer surplus increases.

Answer

Domestic prices decrease and producer surplus decreases.

Answer

Domestic prices remain the same and producer surplus remains the same.