Refer to the Accompanying Table for a Certain Product's Market

question 174

Multiple Choice

Refer to the accompanying table for a certain product's market in Econland. Assume that the world price of the product is $6. What would be the difference in the total revenue received by foreign producers after a quota of 400 units is imposed, compared against the total revenue received by foreign producers when a $1 per unit tariff is paid?

• A)$0 revenue difference
• B)$100 more in revenue with a quota than with a tariff
• C)$400 more in revenue with a quota than with a tariff
• D)$400 more in revenue with a tariff than with a quota

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Definitions:

Downsloping

Characterizes a line or curve on a graph that decreases in value as it moves from left to right, often used in reference to demand curves.

Pure Monopoly Firm

A market structure where a single entity exclusively controls the supply of a product or service without any close substitutes.

Inelastic Range

A portion of the demand curve where changes in price have little to no effect on the quantity demanded of a good or service.

Demand Curve

The demand curve graphically represents the relationship between the price of a good and the quantity demanded by consumers over a certain period, typically showing a downward slope from left to right.