Refer to the Graph Shown for a Small Country That

Multiple Choice

Refer to the graph shown for a small country that is a price taker internationally. Assume the foreign supply of this product is perfectly elastic at a price of $4 per unit. Starting from a free trade equilibrium, an import quota of 2,500 would cause domestic production to:

A) increase from 6,100 to 7,400.
B) increase from 2,400 to 3,600.
C) decrease from 4,800 to 3,600.
D) decrease from 7,400 to 6,100.