Quota
Import quotas limit the total quantity of imports to a fixed level. Unlike tariffs, quotas directly control quantity rather than price, though they raise prices by restricting supply.
Real World
The EU historically imposed quotas on Chinese textile imports — when China joined the WTO in 2005 and quotas expired, a surge of cheap Chinese clothing flooded European markets, highlighting how quotas had been artificially suppressing supply.
Exam Focus
Distinguish quotas from tariffs by noting governments forgo revenue with quotas — this is a common exam comparison point worth specific credit.
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