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

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

Answer 1

When a government imposes an import quota of 8 million units on a good that is currently being imported at a quantity of 10 million units, the total quantity of imports allowed will decrease from 10 million to 8 million units. This reduction in supply (imported units) is likely to lead to an increase in the per-unit price of the good, as domestic consumers will still demand the good, but fewer units will be available for sale.

Therefore, the correct response is:

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