Quota

A quota is a government or cartel-set limit on the quantity of a commodity that may be produced, exported, or imported over a given period.

A quota is a hard limit on how much of a commodity may be produced, exported, or imported over a given period, set either by a single government or agreed jointly by a group of countries acting together, such as OPEC+. Unlike a tariff, which raises the cost of a transaction but still allows it, a quota simply caps the quantity once the limit is reached.

Quotas are used to support prices by restricting supply, to protect a domestic industry from import competition, or to manage a scarce or environmentally sensitive resource. They only work if compliance can be verified and enforced; a quota system that participants can easily exceed without consequence tends to break down over time, a recurring problem for cartel-style production quotas in particular.