The diagram below shows supply and demand curves for bicycles in the domestic Canadian market.Assume that all bicycles are identical. FIGURE 33-4 Refer to Figure 33-4.Assume there is free trade in bicycles.If the world price of bicycles is $500,domestic consumption is ________ at a price of ________.

Question

The diagram below shows supply and demand curves for bicycles in the domestic Canadian market.Assume that all bicycles are identical.  FIGURE 33-4 Refer to Figure 33-4.Assume there is free trade in bicycles.If the world price of bicycles is $500,domestic consumption is ________ at a price of ________.

Quizplus · Accepted Answer

At a world price of $500, the domestic price of bicycles will also be $500. At this price, we can find the quantity of domestic consumption by looking at the demand curve, which intersects with the price of $500 at a quantity of approximately 30,000 bicycles. Therefore, the answer is (C) 30,000; $500.

The Diagram Below Shows Supply and Demand Curves for Bicycles