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Unformatted text preview: into the domestic market (to sell at the higher price). Resources spent on lobbying will lead to the increased inefficiency. • Quota Graphically o After Trade (PW): CS = ABCDEFG PS = H o After Quota (P q ): CS = ABC PS = HD If no fee: F= foreign gains If fee=(Pq-Pw): F= gov rev If fee<(Pq-Pw): F is split between foreign gains and government revenue o Quota Inefficiency: Under-consumption = G Over-production = E If potential for foreign gains, lobbying costs will be some % of F...
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- Winter '09
- government revenue Quota, foreign gains