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Under a Production Quota Policy, the Government Can Maintain a Particular

Question 174

Multiple Choice

Under a production quota policy, the government can maintain a particular support price by reducing the quantity supplied. To maintain a particular support price, how must the quota amount change if the demand curve becomes more elastic?


A) Quota amount increases
B) Quota amount decreases
C) Quota amount does not change
D) Quota amount depends on the supply curve

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