Individual Transfer Quota - ITQ

Posted in Finance, Accounting and Economics Terms, Total Reads: 321
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Definition: Individual Transfer Quota - ITQ

It is the quota imposed on the individuals or the firms which restricts the production of a particular goods or services. If the individual or the firm does not produce the amount as specified by the quota then they can transfer the left portion of the quota to another entity.


It is used to limit the output of a particular goods or service.

 

Example

A country may enter into the import agreement with another country so it may want to limit the output quantity of the product eg sugarcane.

It will be able to restrict the output of sugarcane by imposing Individual transfer quota on the individual farmers and the firms.

 

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