Asked by Latroy Mayfield on May 08, 2024
Verified
(Figure: The Shrimp Market) Use Figure: The Shrimp Market.If the government imposes a quota limiting sales of shrimp to 500 pounds,the quota rent per pound is:
A) $15.
B) $10.
C) $5.
D) The quota rent cannot be determined from the information provided.
Quota Rent
The earnings that accrue to license holders in a system where import quantity is limited by quotas; it represents the difference between domestic prices and world prices due to restricted supply.
Government Imposes
The act of the government enacting regulations, taxes, restrictions, or laws that directly affect business practices, individual behavior, or market operations.
Shrimp Market
A specialized market segment dealing with the buying and selling of shrimp for consumption.
- Understand the significance and formula for calculating quota rent in markets affected by quota limitations.
Verified Answer
Learning Objectives
- Understand the significance and formula for calculating quota rent in markets affected by quota limitations.
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