Use the diagram from Question 5 to analyze the effects of imposing an import quota instead of

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Use the diagram from Question 5 to analyze the effects of imposing an import quota instead of a tariff to protect domestic shoe producers. Draw the diagram as in Question 5 and answer the following questions.
a. Explain why an import quota of Q3Q4 raises the domestic price to pw + t.
b. With import quotas, the Canadian government earns no tariff revenue. Who gets this money now?
c. Is the import quota better or worse than the tariff for Canada as a whole? Explain.
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Microeconomics

ISBN: 978-0321866349

14th canadian Edition

Authors: Christopher T.S. Ragan, Richard G Lipsey

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