QuotasA quota is a limit on the amount of goods that can be imported Putting a quota on a good creates a shortage, which causes the price of the good to rise and makes the imported goods less attractive for buyers. This encourages people to buy domestic products, rather than foreign good.Example: Brazil could put a quota on foreign made shoes to 10,000,000 pairs a year. If Brazilians buyu 200,000,000 pairs of shoes each year, this would leave most of the market to Brazilian producers.Germany has imported 2 million tons of steel from France every year for the past decade. Germany then started an import quota on steel. Germany now only imports around 1 million tons of steel from France, but the country of Germany still uses around 3 tons of steel a year.How will this impact German steel companies?How will this impact Frech steel companies?Why would a country do this?
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