Future price quotas are restrictions on the number of

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Unformatted text preview: rt) that can enter a country. Future Price Quotas are restrictions on the number of units of a foreign-produced good (import) that can enter a country. For example, suppose Japanese producers are currently sending, and want to continue to send, 100,000 cars to the United States each year. Now suppose the U.S. government imposes a quota on Japanese cars at 80,000 a year. This quota means that no more than 80,000 Japanese cars can be imported into the United States. Sellers who expect the price of a good to be higher in the future may hold back the good now and supply the good to the market in the future. Sellers who expect the price of a good to be lower in the future may want to supply the good now instead of later. S uppose you are an oil producer and you want to know the price of oil today and the expected (future) price of oil. Where would you look to find the current and future price of oil? To find the current price, you might go to www.emcp.net/ oil. Here you will see the current (or sometimes called spot) price for o...
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