Suppose a Binding Output Quota Is Imposed in a Previously

Multiple Choice

Suppose a binding output quota is imposed in a previously competitive market with free- market equilibrium price and quantity. The result is

A) higher price and lower quantity exchanged.
B) higher price and higher quantity exchanged.
C) no change in price or quantity exchanged.
D) lower price and higher quantity exchanged.
E) lower price and lower quantity exchanged.