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

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.

Answer 1

When a government imposes an import quota of 8 million units, it restricts the quantity of the good that can be imported to that amount. This is less than the current import quantity of 10 million units, meaning that the quantity imported will decrease.

With the reduction in the quantity available due to the import quota, the demand for the good will remain the same, but the supply will decrease. This can lead to a higher equilibrium price for the goods in the market as consumers compete for the limited quantity available.

Therefore, the likely result is:

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