On January 1, 2005, quotas on clothing imports to the United States first instituted in the 1960s to protect the U.S. garment industry were eliminated.
a. Demonstrate graphically how this change affected equilibrium price and quantity of imported garments.
b. Demonstrate graphically how U.S. consumers benefited from the end of the quota system.
c. What was the likely effect on profits of foreign companies that sold clothing in the U.S. market?