What are quota rents? Who gets the quota rents? If you are a foeign exporting nation...

What are quota rents?

Who gets the quota rents?

If you are a foeign exporting nation would you prefer the domestic importing nation impose a tariff on you or a quota? Explain.

Expert Solution

Quota rents

Quota rent is the economic rent received by the owner of the imported good that is subject to thequota
A quota is a government-imposed trade restriction that limits the number of goods that can be imported or exported during a particular period

Who gets the quota rents

The importing domestic nation will get the quota rent
If it is a person who is importing the item he will get the quota rent
But in the case of foreign marketing where they export products to a nation for their business, the government of imported (domestic) will get the quota rent

If you are a foeign exporting nation would you prefer the domestic importing nation impose a tariff on you or a quota

A tariff is tax or duty to be paid on a particular imports or exports.
So when i do export an item to the other nation which imposes a tariff will leads to economic losses
Hence me as a busniess personal, consider the tariff reduces the profit and hence doesnot support the statement
The exporter have to pay a duty which indeed is expensive to me

HOPE THIS HELPS
PLEASE COMMENT IF YOU HAVE ANY DOUBTS

THANKS

Rahul Sunny answered 2 years ago

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