Course: Microeconomics - Supply and Demand Analysis

President Ronald Reagan negotiated in the early 1980s the imposition of a <> quota on imports of Japanese automobiles sold in the USA. Some of his advisors recommended that he set a higher tariff (tax) on imports. Assuming that the tariff had been in the form of a constant tax "T" on each Japanese automobile and that "T" had been chosen such that the reduction would have been the same as with a quota, what differences are there between the prices paid by American consumers for Japanese automobiles in the two cases?