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Read the following article on the issue of how national parks in the US cope with a large number of visitors.
Assume that they want to restrict the number of visitors to Yellowstone to 3m visitors a year, which is smaller than the current record at 4.3m. They consider two policies:
(i) raising the price of admissions, and
(ii) setting a quota that limits the number of visits to 3m. Compare the effect of these two policies on consumer surplus and welfare. Use a graph to show which policy is superior.
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