Question

An import quota is an example of a _________.A. tax on imported goods. B. quantity restriction. C. price floor. D. price ceiling. E. tariff. Restricting the quantity of a good that can be imported is likely to mean that the price of that good will ________ rise stay the same fall _________.

Answer 1

Answer:

The correct answer is option B.

The price of good will fall.

Explanation:

An import quota can be defined as a quantitative restriction on the import of a product. It is a trade restriction imposed by the government that puts physical limits on the volume of products that can be imported into a country.

The imposition of import quota causes the quantity of imported products to decline, As the supply of products gets reduced. The price of a product increases because of the leftward shift in the supply curve.