You are the manager of the only firm worldwide that specializes in exporting fish products to...

You are the manager of the only firm worldwide that specializes in exporting fish products to Japan. Your firm competes against a handful of Japanese firms that enjoy a significant first-mover advantage. Recently, one of your Japanese customers has called to inform you that the Japanese legislature is considering imposing a quota that would reduce the number of pounds of fish products you are permitted to ship to Japan each year. Your first instinct is to call the trade representative of your country to lobby against the import quota.

Is following through with your first instinct necessarily the best decision?

a. Yes - a quota restrains your sales and will ultimately hurt your bottom line.

b. No - a quota may actually increase the profits of the follower.

c. No - a quota won't have any effect on a follower.

d. Yes - a quota will force the price to be lower and ultimately lower your profits.

Expert Solution

Rahul Sunny answered 1 year ago

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