Suppose beer producers in Munich became aware of the low price of one barrel of beer in the domestic market relative to that in the United States.What will be the impact of this price difference?

Question

Quizplus · Accepted Answer

If beer producers in Munich became aware of the low price of one barrel of beer in the domestic market relative to that in the United States, they might increase the price of beer in the domestic market to match the price in the United States. As a result, the price of beer in the domestic market will increase. This will not affect the beer production in Munich or the U.S. or beer consumption in the domestic market.

Suppose Beer Producers in Munich Became Aware of the Low