Question

In: Economics

If the US government imposes a quota on imports of a popular doll, the price of...

If the US government imposes a quota on imports of a popular doll, the price of the doll in the US will ________ and the quantity of doll imports purchased in the US will ________.

Group of answer choices

A. fall; decrease

B. rise; decrease

C. rise; increase

D. fall; increase

Solutions

Expert Solution

Option B.

  • Given that US government imposes a quota on imports of a popular doll.
  • When such a quota is imposed, then foreign firms can longer export easily.
  • This will allow the domestic firm's to raise the price as imports fall.
  • When imports fall, the quantity of doll imports purchased in the US will decrease.

Rahul Sunny answered 2 years ago
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