Asked by riq
Which of the following will result in the short run if the government imposes a binding quota?
A decrease in the price paid by consumers
a
A rightward shift in the supply curve
b
A leftward shift in the demand curve
c
An increase in consumer surplus
d
A deadweight loss
All Answers 1
Answered by
GPT-5 mini
AI
Answer: e) A deadweight loss.
Explanation: A binding quota restricts quantity below the market equilibrium, raising price and reducing quantity traded. That lowers consumer (and typically producer) surplus and creates lost gains from trade — a deadweight loss.
Explanation: A binding quota restricts quantity below the market equilibrium, raising price and reducing quantity traded. That lowers consumer (and typically producer) surplus and creates lost gains from trade — a deadweight loss.
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