Quota restricts import supply, shifting the curve leftward

Steps:

• Identify the supply curve shift from S1 to S2, indicating reduced import availability.
• Recall trade protection effects: tariffs raise prices without quantity limits; quotas cap quantities.
• Match the shift to a leftward movement, reducing supply at all prices.
• Confirm quota causes this inelastic supply reduction, unlike price-based measures.

Why C is correct:

• A quota limits import quantity directly, shifting the supply curve leftward to reflect the fixed maximum, per trade theory.

Why the others are wrong:

• A: Ad valorem tariff scales with price, rotating supply upward without parallel shift.
• B: Embargo bans imports entirely, collapsing supply to zero, not a partial shift.
• D: Specific tariff adds fixed amount per unit, shifting supply vertically upward by that amount.

Final answer: C