Quota
Definition. A quota is a protectionist measure that sets a physical limit on the quantity of a good that may be imported into a country over a given period. By restricting the supply of imports, a quota raises the domestic price and allows domestic producers to sell more at a higher price.
Unlike a tariff, a quota generates no direct tax revenue for the government unless import licences are sold, and any gain from the higher price tends to accrue to importers or foreign suppliers holding the quota rights.
This term belongs to Protectionism in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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