Tuesday, October 08, 2019

What are "quota rents"? A simple definition for everyone.

If you import a product into your country from another country, but your government only lets you import a small amount of your product, then the price goes up because more people want to buy it than can actually access it. That increased price is called "quota rent".

This explains why the prices of imports go up when you try to limit the number of them.

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