Question

the effect of an import quota is?

Answer 1

Import quota is a non-tariff barrier that makes the effects of the quantity of imports to decrease and price of imports to increase. It can also be said that import quota increase the price and reduces the quantity of imported goods. It will bring a level playing field in the domestic market where the import is taking place. With import quota in place, the domestic producers can compete with the imports as both the domestic as well as imported goods are at the similar price rates. It is the part of protectionist policy followed by the government.