Economics 9708 · AS & A Level · Protectionism

Protectionism — practice question

The diagram illustrates the demand for, and supply of, a foreign-made mobile (cell) phone. The starting position in the domestic market is X. Importers raised the supply of the phone, and demand for the phone also rose. The government then considered protecting domestic manufacturers by introducing a limit on imports that would keep supply at the original quantity. How would the price differ between the new equilibrium without an import limit and the equilibrium with an import limit?

  • Aa movement from E to F
  • Ba movement from F to G
  • Ca movement from G to E
  • Da movement from G to F

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