Although Vietnamese and American catfish are different species the former is a member of the family Pangasiidae and the latter of Ictaluridae the two fish are close substitutes. As a 2002 New York Times article put it, "Tra looks like catfish; tra tastes like catfish." Behind the terminological kerfuffle, however, is serious money.

The following summarizes the state of the U.S. catfish market in 2009:

U.S. catfish production is 480 million pounds per year

Foreign supply of catfish to the U.S. is 150 million pounds per year.

Foreign producers are willing to supply the U.S. with all of the catfish demanded at the current U.S. price of 80 cents per pound.

We will assume the domestic and foreign markets can be modeled as perfectly competitive

For purposes of the following, assume that the term "catfish" refers to both foreign and domestic species and that consumers consider them equivalent.

The U.S. demand curve for catfish is

QD = 1890 - 15.75P(or P = 120 (1/15.75)QD ).

The U.S. supply curve is

Q US = 240 + 3P(or P = 80 + (1/3)Q US ).

(C) (6 points) Suppose that, in an attempt to forestall the new inspection regime, the Vietnam Association of Seafood Exporters and Producers (VASEP) proposes a voluntary export restraint to reduce U.S. catfish imports from 150 million to only 90 million pounds per year. What would be the effects of such a limit on the price, production, and consumption of catfish in the U.S.? How much better or worse off would such voluntary export restraints leave Vietnamese producers compared to the equilibrium before the USDA inspection policy?