An import quota is a limit on the quantity of a good that may be imported.
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The points to remember
- Define it like this: "A quota is a limit on the quantity of a good that can be imported."
- Draw S + quota: home supply plus the quota, above Pw.
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The price rises as with a tariff, but the extra money goes elsewhere.
Who gains, who loses
Consumers lose
They pay €5, not €3, and buy 50, not 70.
Home producers gain
They sell 30, not 10, at €5: revenue and producer surplus rise.
Licence holders gain
The quota rent: €2 extra on each of the 20 imported.
The government gets nothing
Unlike a tariff, unless it sells the licences.
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Paper 1 asked this in May 2026, as part (a) for 10 marks.
Explain the consequences for domestic consumers and domestic producers when a country imposes a quota on imported goods.
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See the answer broken into clear points, with guidance on how each point earns marks.
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How the 10 marks are given
| Marks | What your answer needs |
|---|---|
| 9–10 | Theory fully explained, terms used correctly all the way through, the diagram included and fully explained |
| 7–8 | Theory explained, terms mostly right, the diagram included and explained |
| 5–6 | Theory partly explained, some terms, the diagram included |
| 1–4 | Theory only described or stated; few relevant terms |