why-does-an-import-quota-lead-to-deadweight-loss-and-how-does-this-affect-econom

Question

Why does an import quota lead to deadweight loss, and how does this affect economic efficiency?

Accepted Answer

It leads to deadweight loss because it restricts trade, reducing economic efficiency.

Answer

It leads to deadweight loss because it decreases producer surplus, improving efficiency.

Answer

It leads to deadweight loss because it increases consumer surplus, reducing efficiency.

Answer

It leads to deadweight loss because it increases government revenue, improving efficiency.