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A quota is a limit on the quantity of a good that is being imported. For example a sugar quota states that only 1000 tons of sugar can be imported into a certain country. A quota acts in almost the same way as a tariff. It is a means for domestic protectionism in international trade. They are implemented because to protect the domestic firm from international competition because the world price of a good is lower than the price that the domestic firm can offer. The domestic jobs in that particular industry are protected, while the domestic consumers lose out because they are not able to buy the product at the lower world price.

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16y ago

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