Refer to Figure 3.5, which shows the European Market for Pants. The European price for pants is $8 per pant. The Vietnamese price (world) for pants is $3 per pant.

Suppose now that Europe imposes an import quota of 3.4 million pants.

Q1) What is the change in consumer surplus after the import quota is imposed?

Q2) What is the deadweight loss from imposing the import quota?

Figure 3.5 - European Market for Pants

P SC 12 SC + Q 3 4.1 5.2 6.5 8.6 11