Use the Following Figure to Answer the Questions : Figure

question 4

Multiple Choice

Use the following figure to answer the questions : Figure 10-5 shows the domestic U.S.market for bananas and the global market for bananas.The domestic supply curve is given by SUPPLY_US.With free trade,the equilibrium output in the U.S.market is Q.The import quota imposed by the government is equal to 0A.
-Which of the following correctly identifies the effect of an import quota on a good?

• A)Domestic producers do not gain from an import quota.
• B)The gain to domestic producers is higher than the loss to domestic consumers.
• C)Prices in the global market will fall due to the imposition of an import quota.
• D)Domestic consumers bear the burden of an import quota in terms of higher domestic prices.

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