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

Question

Quizplus · Accepted Answer

At the world price of $1, domestic producers supply 1 unit, and domestic demand is 16 units. The difference of 15 units is supplied by foreign producers.

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