Refer to the accompanying figure, which shows the annual domestic supply and annual domestic demand for jeans in a small country.
Suppose this country is open to trade with the rest of the world, and the world price of a pair of jeans is $40. If the government imposes a quota on imported jeans of 12,000 pairs per year, then the new equilibrium price of jeans in this country will be:
A. $80
B. $60
C. $120
D. $100
Answer: A
Economics
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