The accompanying table gives domestic supply and demand schedules for a product. Suppose that the world price of the product is $1.
$$\begin{array} { | c | c | c | }
\hline \begin{array} { c }
\text { Quantity } \
\text { Supplied } \
\text { (Domestic) }
\end{array} & \text { Price } & \begin{array} { c }
\text { Quantity } \
\text { Demanded } \
\text { (Domestic) }
\end{array} \
\hline 12 & \$ 5 & 2 \
\hline 10 & 4 & 4 \
\hline 7 & 3 & 7 \
\hline 4 & 2 & 11 \
\hline 1 & 1 & 16 \
\hline
\end{array}$$ With free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers
Would be

Question

The accompanying table gives domestic supply and demand schedules for a product. Suppose that the world price of the product is $1.
$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Quantity } \
\text { Supplied } \
\text { (Domestic) }
\end{array} & \text { Price } & \begin{array} { c } 
\text { Quantity } \
\text { Demanded } \
\text { (Domestic) }
\end{array} \
\hline 12 & \$ 5 & 2 \
\hline 10 & 4 & 4 \
\hline 7 & 3 & 7 \
\hline 4 & 2 & 11 \
\hline 1 & 1 & 16 \
\hline
\end{array}$$ With free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers
Would be

Quizplus · Accepted Answer

At the world price of $1, the domestic supply is 1 unit (as per the given supply schedule), and the domestic demand is 16 units. Therefore, to meet the domestic demand of 16 units when only 1 unit is supplied domestically, 15 units must be supplied by foreign producers.

The Accompanying Table Gives Domestic Supply and Demand Schedules for a Product