The table below gives the demand and supply schedules for computers in a small country :
| Price per Computer ($) | Quantity Demanded | Quantity Supplied |
|---|---|---|
| 100 | 900 | 0 |
| 200 | 700 | 200 |
| 300 | 500 | 400 |
| 400 | 300 | 600 |
| 500 | 100 | 800 |
Under free trade the country was importing computers at a price of 100, but now imposes a quota that limits imports to 300 computers. The price will go up by
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Trade policy: tariffs, quotas and protection has come up 63 times in 6 exams since 2010.
This question is on Quotas, tariff-quota equivalence and non-tariff barriers, part of Trade policy: tariffs, quotas and protection in International Economics.
Quantity limits on trade and how they compare with tariffs.
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Question from the JNU SIS 2012 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.