Economics Trade Barriers Questions
An import quota is a restriction imposed by a government on the quantity of a particular good that can be imported into a country. It sets a maximum limit on the amount of a specific product that can be brought in from foreign countries.
Import quotas act as trade barriers by limiting the availability of imported goods in the domestic market. This restriction reduces competition from foreign producers, allowing domestic producers to have a larger market share and potentially charge higher prices. Import quotas also limit consumer choices by reducing the variety of goods available for purchase. Additionally, import quotas can lead to higher prices for consumers due to reduced competition and limited supply.