Empirical Studies Show That Because Voluntary Export Quotas Are Typically

question 62

Multiple Choice

Empirical studies show that because voluntary export quotas are typically administered by exporting countries, foreign exporters tend to

• A) raise their export prices, thus capturing much of the quota's revenue effect.
• B) lower their export prices, thus losing much of the quota's revenue effect.
• C) raise their export prices, thus selling more goods overseas.
• D) lower their export prices, thus selling fewer goods overseas.

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Definitions:

Price Setting

The process by which businesses determine the selling price of their products or services, taking into account factors like costs, market demand, and competition.

Differential Analysis

An approach to decision making that focuses on the costs and benefits that change between decision alternatives.

Income Change

A variation in the amount of earnings a business generates over a period.

Alternative Course

A different plan or method that could be chosen instead of the original or current one.