quota
quotaA quantitative allocation. This may be set as a minimum or a maximum. A quota for jobs for disadvantaged groups, or for compulsory deliveries by former planned economy farmers to state marketing organizations, would be a minimum. A limit to imports of cars, or quantity of milk sold under the Common Agricultural Policy (CAP), would be a maximum. In each case it can be argued that any objective achieved by a quota system could be achieved at lower cost by use of the price mechanism, through an appropriate tax or subsidy. The use of quotas tends to inhibit competition, directly if quotas are allocated to individual producers, and indirectly if they are fixed en bloc, as this encourages the formation of organizations to share out the market.
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