Do import quotas generate revenue? (2023)

Do import quotas generate revenue?

If a quota is administered by selling quota tickets (i.e., import rights), then a quota will generate government revenue; however, if the quota is administered on a first-come, first-served basis or if quota tickets are given away, then no revenue is collected.

(Video) Basic import quotas analysis
(Mike Moore (GWU econ professor))
Are import quotas effective?

Quotas are more effective in restricting trade than tariffs, especially if domestic demand for something is not price-sensitive. Quotas may also be more disruptive to international trade than tariffs. Applied selectively to various countries, they can be utilized as a coercive economic weapon.

(Video) Quotas and surplus
(Andrew Hingston)
What happens when there is an import quota?

An import quota lowers consumer surplus in the import market and raises it in the export country market. An import quota raises producer surplus in the import market and lowers it in the export country market. National welfare may rise or fall when a large country implements an import quota.

(Video) Import Quota - Trade Protectionism
How does an import quota affect the government's revenue?

The total welfare loss of an import quota to the national economy is the gov- ernment revenue lost to foreign importers and the loss of consumer surplus due to the deviation from the competitive outcome under free trade. There is greater loss of government revenue and consumer surplus with the quota.

(Video) Import Quota Explainer
(Shanghai International IB Economics)
Are quotas more effective than tariffs?

Quotas are more effective in restricting trade than tariffs, particularly if domestic demand for a commodity is not sensitive to increases in price.

(Video) Import Quota
(Iris Franz)
Do tariffs generate revenue for the government?

Because a tariff is a tax, the government will see increased revenue as imports enter the domestic market. Domestic industries also benefit from a reduction in competition, since import prices are artificially inflated.

(Video) Key Diagrams - Import Quotas
Who benefits from an import quota?

Import quotas are government-imposed limits on the quantity of a certain good that can be imported into a country. Generally speaking, such quotas are put in place to protect domestic industries and vulnerable producers.

(Video) Tariffs & Import Quotas Made Easy
What are the advantages and disadvantages of import quotas?

A pro of import quotas is that they keep domestic prices and allow domestic producers to hold a larger market share and can protect fledgling industries. A con is that it causes net efficiency loss. Also, the government does not earn revenue from them, and they leave room for corruption.

(Video) 11f: the effects of an import quota
(stephen king)
Who benefits from a quota?

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.

(Video) Protectionist Quotas
(Jason Welker)
What is quota revenue?

A revenue quota is a common sales quota used to measure a predetermined goal for total revenue. Example: A furniture company has set a revenue quota of $20,000 for the month for each sales representative.

(Video) International Trade- Micro Topic 2.9
(Jacob Clifford)
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