Suppose the before-trade domestic price of natural gas in Australia is $15 per kg. The world price of natural gas is $30 per kg. Australia is a price-taker in the natural gas market.
-According to this statement, if trade in natural gas is allowed, the price of natural gas in Australia will be:
A) greater than $30 per kg
B) equal to $30 per kg
C) less than $30 per kg
D) greater than, equal to, or less than $30 per kg
Correct Answer:
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