ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Countries use quotas in international trade to help regulate the volume of trade between them and other countries. Countries sometimes impose quotas on specific products to reduce imports and increase domestic production. In theory, quotas boost domestic production by restricting foreign competition.

Detailed explanation-2: -The manufacturer benefits from tariffs and quotas since the government regulates the production of goods using tariffs and quotas to encourage production.

Detailed explanation-3: -Ultimately, quotas benefit and protect the producers of a good in a domestic economy, though the consumers end up paying more if the domestically produced goods are priced higher than imports.

Detailed explanation-4: -Quotas restrict market access to imported products. The result is usually an increase in the domestic price paid by consumers. This leads to a fall in consumer surplus and lower real incomes. It can also cause a reduction in the amount of choice that consumers have in a market.