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"Whatever can be done by a tariff can be done by a Quota". Agree or Disagree...

"Whatever can be done by a tariff can be done by a Quota". Agree or Disagree and why?

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Answer #1

"Agree"

A tariff imposed on the goods imported into the nation increase the price directly of the goods. This decreases the demand for the imported goods. Quota, on the other hand, restricts the amount of the goods which can be imported into the nation and this restriction increases the price of the local and the imported good.  

The end result is the same for both the tariff and quota. The consumer surplus is equally affected in both the case and the inefficient local producer who were not able to compete with the import are able to increase production and cause deadweight loss.

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