A country currently imports 10 million units of a good at a price of $10 for each unit. If the government imposes an import quota of 8 million units, which of the following is likely to result?(1 point)

Question

Responses

The quantity imported will decrease, and the per-unit price will decrease.
The quantity imported will decrease, and the per-unit price will decrease.

The quantity imported will increase, and the per-unit price will decrease.
The quantity imported will increase, and the per-unit price will decrease.

The quantity imported will increase, and the per-unit price will increase.
The quantity imported will increase, and the per-unit price will increase.

The quantity imported will decrease, and the per-unit price will increase.

Answer 1

When the government imposes an import quota of 8 million units, this means that the country can only import up to 8 million units of the good, which is a decrease from the previous import quantity of 10 million units.

As a result of this reduced supply (due to the quota), the following is likely to occur:

• The quantity imported will decrease (from 10 million to 8 million).
• The reduced availability of the good is likely to lead to an increase in its per-unit price, as demand remains the same but supply is constrained.

Therefore, the correct response is:

The quantity imported will decrease, and the per-unit price will increase.