Refer to the figure below to answer the following questions. Figure 7.1.2
The figure shows the market for helicopters in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $36 million per helicopter.
-In Figure 7.1.2,with international trade,________ helicopters per year are produced in Canada.
A)360
B)480
C)720
D)240
E)600

Question

Refer to the figure below to answer the following questions.  Figure 7.1.2
The figure shows the market for helicopters in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $36 million per helicopter.
-In Figure 7.1.2,with international trade,________ helicopters per year are produced in Canada.
A)360 
B)480 
C)720 
D)240 
E)600

Quizplus · Accepted Answer

With international trade, Canada will produce at the point where the world price equals the marginal cost of production. From the graph, this occurs at a quantity of 720 helicopters per year. Therefore, the answer is (C) 720.

Refer to the Figure Below to Answer the Following Questions