In the domestic market, following the imposition of an import quota, imports decrease, domestic production increase, and prices increase.
The domestic market can be referred to or considered as a type of market, wherein the maximum quantities are supplied within the economy, and the supplies from the foreign countries are significantly lower.
As the production is done within the economy, there is an ultimate increase in the domestic production levels, and a decrease in the number of imports made by the economy. As a result, the price of the goods and services also increases due to an increased domestic supply.
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