How does the demand curve facing a home monopolist compare in a no-trade situation to a situation in which a quota protects the monopolist's output?
a. They are identical.
b. The quota-protected demand curve lies to the right of the no-trade demand curve.
c. The quota-protected demand curve lies to the left of the no-trade demand curve.
d. The no-trade demand curve is perfectly price elastic at the world price; the quota-protected demand curve has a negative slope.
Ans: c. The quota-protected demand curve lies to the left of the no-trade demand curve.
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