AP Micro & MacroInternational Trade & Finance
Import Quota
An import quota is a legal limit on the quantity of a good that can be imported during a period.
By restricting supply, it raises the domestic price and protects domestic producers, much like a tariff but without government revenue. It reduces consumer surplus and creates deadweight loss. The price markup accrues to those holding import licenses.
Interactive graph
International Trade →
Drag the curves and see it for yourself.
Study module
International Trade →
Full lesson, practice questions, and flashcards.