What does a quota restrict?

A quota primarily restricts the number of foreign imports allowed into a country. This government-imposed limit is used to control the volume of goods entering a market, ensuring that domestic producers can compete against foreign competition more effectively. By establishing quotas, a country can protect its local industries from being overwhelmed by cheaper or excess foreign products. Quotas can also be used to manage trade balance and achieve economic goals by limiting reliance on foreign goods.

The other options, while they may relate to business and trade, do not accurately reflect the primary function of a quota. A quota does not directly limit how many domestic products are sold or dictate the pricing of local goods. Additionally, it does not regulate the profits of local businesses since profit margins are influenced by various factors, including costs and market competition rather than import quotas themselves.