Import Quota (Detailed Analysis)

Cards (6)

  • Impact of a quota on a market
    1. Increase in price from PW to PW + Q
    2. Contraction in domestic demand from Q2 to Q4
    3. Increase in domestic supply from q1 to q1 + Q3 + Q4
    4. Reduction in imports from q1 + Q2 to q1 + Q3
  • Domestic producer revenue
    Initially a<|>Now a + c + e + h + i
  • Foreign producer revenue

    Initially b + c + d<|>Now b + f + g
  • It's hard to know if foreign producer revenue has increased or decreased without actual figures
  • Deadweight losses

    I - loss of world efficiency<|>J - loss of consumer surplus
  • Understanding the diagram, impact on prices and quantities, effect on revenue, and deadweight losses is sufficient for a good essay on the impact of a quota