EFFECTS OF A QUOTA
The introduction of a quota will result in inefficient resource allocation, meaning that allocative efficiency cannot be achieved.

The diagram above shows that due to the introduction of a quota less of the good is now able to be consumed. This means that the equilibrium point is no longer able to be reached and resources are allocated inefficiently, resulting in deadweight loss (the area in green). Both consumer and producer surpluses are reduced with some of the consumer surplus being transferred to producers (the area in pink), meaning that society as a whole is worse off.

DEFINITION: DEADWEIGHT LOSS - The loss in welfare to society cause by intervention in the market place.

EFFECT OF A MINIMUM PRICE
A minimum price will mean that equilibrium cannot be reached because prices are being kept artificially high and the consumer surplus will be reduced.
The producer surplus may or may not be reduced depending upon how high the minimum price is set.

The area in green shows the deadweight loss to society of the minimum price. The area in pink shows the consumer surplus which has been transferred to producers. By imposing a minimum price, producers receive a higher price for their product and may be better off – but at the cost of consumers being a lot worse off. The gains to producers is less than the total loss to consumers and society as a whole is worse off.

EFFECT OF A MAXIMUM PRICE
If the government imposes a maximum price then equilibrium cannot be reached because prices are being kept artificially low and there will be excess demand in the market.

With the imposition of a maximum price, the price is forced below the equilibrium price and there is a shortage in the market.