a-country-imposes-an-import-quota-on-a-good-how-does-this-compare-to-imposing-a-

Question

A country imposes an import quota on a good. How does this compare to imposing a tariff on the same good in terms of domestic price changes?

Accepted Answer

Both increase the domestic price, but a tariff generates government revenue.

Answer

An import quota decreases the domestic price, while a tariff increases it.

Answer

Both decrease the domestic price, but a tariff generates government revenue.

Answer

An import quota increases the domestic price, while a tariff has no effect.