The Exciting World of Economics: Quota Rent Calculation

What is the quota rent per pound of shrimp if the government imposes a sales limit of 1,000 pounds and the price remains at $3.25 per pound?

The quota rent per pound of shrimp, if a sales limit of 1,000 pounds is imposed by the government and the price remains at $3.25 per pound, is assumed to be $0.

Explanation:

The question is asking about what the quota rent is per pound of shrimp if the government imposes a sales limit (quota) of 1,000 pounds of shrimp. Quota rent, in the context of economics, refers to the difference between the demand price and the supply price at the quota limit.

Given that the original price is $3.25 per pound and there is no specific indication of a change in price due to the quota, it is reasonable to assume that the quota rent per pound is $0 as the price remains the same. However, a real-life situation might be different, as creating a limit on the quantity sold can lead to price changes due to market dynamics.