-Refer to the Above Diagram,where S_d and D_d Are the Domestic

question 87

Multiple Choice

-Refer to the above diagram,where S_d and D_d are the domestic supply and demand for a product and P_c is the world price of that product.S_d + Q is the product supply curve after an import quota is imposed.The effect of the import quota on domestic price and domestic consumption is:

• A) the same as that of a tariff of P_cP_t.
• B) the same as that of a tariff of P_tP_a.
• C) the same as that of a tariff of P_cP_a.
• D) to raise price by more and reduce consumption less than a tariff of P_cP_t.

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