What is a quota in economic terms?

A quota in economic terms refers to a limitation or restriction on the amount of a good that can be produced or sold. This concept is often applied in international trade, where countries impose quotas on the import of certain products to protect domestic industries from excessive competition or to regulate trade balances. By setting a specific limit, quotas can influence supply and demand dynamics, allowing governments to control market conditions more effectively. This makes option C the correct choice, as it accurately captures the essence of what a quota entails in economic discussions.

In contrast, a measure of consumer demand for products relates more to market research and demand forecasting rather than the limitations of production. An unrestricted allowance for product production is the opposite of a quota, as it implies there are no limits on how much can be produced. A tax on imported goods, typically called a tariff, is also not a quota; it relates to pricing and revenue generation rather than directly limiting quantities of goods.