When the Government Imposes a Quota on Sales of a Good

Multiple Choice

When the government imposes a quota on sales of a good or service, it usually licenses the right to sell a given quantity of the good. The market price of the license is equal to:

A) the demand price of the good.
B) the wedge that represents the difference between the demand price and the supply price.
C) the quota rent.
D) the quota rent plus the wedge that represents the difference between the demand price and the supply price.