Individual Transfer Quota - ITQ
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Definition of 'Individual Transfer Quota - ITQ'
A quota, imposed on individuals or firms by a governing body, that limits the production of a good or service. If the entity does not produce the maximum amount as set out by the quota, they may transfer the remaining portion of the quota to another party.
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Investopedia explains 'Individual Transfer Quota - ITQ'
Individual transfer quotas (ITQ) are used to limit the output of a given good or service. For example, due to an import agreement with another country a government may want to impose an ITQ on domestic farmers of wheat . By imposing an ITQ on each farmer, the government can impose a limit on the total production of wheat.
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