Suppose India imports Lentils from USA at the price (P) of $ 20 per kg. The domestic demand (D) =1200 -10P and domestic supply (S) = 200 + 40P. What will be the effect of fixing import quota of 200 kg on price?
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JNU SSS 2021 Question 17: Trade policy: tariffs, quotas and protection
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Trade policy: tariffs, quotas and protection has come up 63 times in 6 exams since 2010.
What this question tests
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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