Autos in Europe sell in two distinct, but interdependent markets: the market for European cars (E-cars) and the market for Japanese cars (J-cars)....

Autos in Europe sell in two distinct, but interdependent markets: the market for European cars (E-cars) and the market for Japanese cars (J-cars). Estimated supply and demand in each market are:

QED = 40 - 6PE + 4PJ              QES = 4 + PE

QJD = 36 - 4PJ + 3PE               QJS = 6 + 3PJ

(subscripts refer to European and Japanese cars respectively; superscripts refer to Demand and Supply, e.g. QED = demand for European, PJ = price of Japanese cars.)

If a VRA restricts the supply of J-cars in Europe to QJ = 25, then, compared to the equilibrium without the VRA,

            a.         More E-cars are sold, and PE decreases

            b.         Fewer E-cars are sold, and PE increases

            c.         More E-cars are sold, and PE increases

            d.         Fewer E-cars are sold, and PE decreases