Economists Frequently Urge Governments of Developing Countries to Replace Import

question 14

Essay

Economists frequently urge governments of developing countries to replace import quotas with import tariffs as a first step in a strategy that aims to reduce import protection.What is the reasoning offered by economists to support this recommendation to developing countries?

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Definitions:

Downward-Sloping

A term describing a curve or line that decreases in value as it moves from left to right, often used to describe demand curves in economics.

Cournot Equilibrium Price

A concept in oligopoly theory where each firm chooses its quantity to maximize profit, assuming the other firms' quantities remain fixed, leading to a stable market price.

Constant Unit Cost

A situation where the cost to produce one unit of a good remains the same, regardless of the total quantity produced.

Demand Function

A mathematical relationship that expresses the quantity of a good or service demanded at various prices.