If the Government Imposes a Limit on Sales of a Good

question 94

Essay

If the government imposes a limit on sales of a good or service by issuing a license that gives the owner the right to sell a given quantity of the good, the difference between the demand and supply price is:
A.the quota rent.
B.the market price of the license.
C.the quota price.
D.the quota rent or the market price of the license.

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Definitions:

Compasses

Instruments used for navigation and orientation that show direction relative to the geographic cardinal directions (North, South, East, and West).

Absolute Advantage

The ability of an individual, company, or country to produce a good or service more efficiently than others with the same resources.

Gain From Trade

The benefit that arises from efficient allocation of resources, allowing parties involved to obtain goods or services they desire at a lower opportunity cost.

Condition

The current state or quality of an item, product, or entity, often used to describe something's appearance, functionality, or working order.