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Price (dollars per kilogram) 30 25 S + quota 20 15 B 10 World price 5 0 200 400 600 800 1,000 1,200 Quantity (thousands
Price (dollars per kilogram) 30 25 S + quota 20 15 B 10 World price 5 0 200 400 600 800 1,000 1,200 Quantity (thousands of kilograms per year) Refer to Figure 7.3.2. The supply of peanuts in Canada is made up of Canadian grown peanuts and imported peanuts. Initially, Canada engages in free trade in the peanut market. Then Canada puts a quota on peanut imports. The graph shows the Canadian market for peanuts when the Canadian government puts a quota on peanut imports. The Canadian consumer surplus that is redistributed to Canadian producers is _ and the quota creates a deadweight loss equal to A. area B + C + D + E; zero B. area B + C + F; area D O C. area B; area D + E O D. area B; area C + E E. area B + C + D; area E + F
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