Final Answer:
A quota-limit is likely to decrease competition in the market. Option B is answer.
Step-by-step explanation:
A quota-limit restricts the amount of a specific good or service that can be imported or produced. This restriction directly impacts the market in several ways:
Reduced Supply: By limiting the available quantity of goods or services, a quota-limit decreases the overall supply in the market.
Higher Prices: With less supply available, the demand-supply equilibrium shifts, leading to an increase in prices.
Reduced Incentives for New Entrants: Due to the limit on production or import, the potential profits for new players entering the market may decrease, discouraging competition.
Increased Market Share for Existing Players: As the overall supply shrinks, existing players in the market can secure a larger share due to less competition.
Therefore, the overall effect of a quota-limit is a decrease in competition within the market, as it restricts the entry of new players and incentivizes existing players to maintain their position.
Option B is answer.