Assume that the UK Government imposes positive quotas on the import of strawberries (Q > 0) in an attempt to boost local production of strawberries. Recently, strawberry producers in the South East of the UK have been hit by a huge surge in strawberry imports rendering their production unprofitable. Hence, the local market for strawberries is served (or supplied) by local producers (which are not subjected to any quotas) and the foreign producers (which are subjected to quotas Q).

Discuss and illustrate graphically the following:

The SUPPLY curve (Sd) of strawberries regarding the domestic strawberries suppliers. The market price is denoted by P* (P*=950 per ton) and the quantity supplied by domestic strawberries producers is denoted as Q*d (Q*d=328 tons per year).

Foreign SUPPLY curve (Sf) of strawberries regarding the foreign strawberries suppliers. The market price is denoted by P* (P*=950 per ton) and the quantity supplied by foreign strawberries producers is denoted as Q*f (Q*f=110 tons per year). On the same graph show the effect of the quota on the foreign SUPPLY curve (denoted as Sqf) and on the quantity supplied by the foreign suppliers Qqf (Qqf =65 tons per year) after the imposition of the quota.

The demands function is not provided in that case.