The table below shows hypothetical Canadian domestic demand and supply schedules for granite.Assume there are no restrictions on trade. TABLE 32-6 Refer to Table 32-6.At what price and quantity combination will Canada not engage in international trade in granite?

Question

The table below shows hypothetical Canadian domestic demand and supply schedules for granite.Assume there are no restrictions on trade.  TABLE 32-6 Refer to Table 32-6.At what price and quantity combination will Canada not engage in international trade in granite?

Quizplus · Accepted Answer

To determine when Canada will not engage in international trade, we need to find the price at which domestic demand equals domestic supply. In the table, this occurs at a price of $700 and a quantity of 80 tonnes. At this price and quantity combination, domestic demand and supply are equal at 80 tonnes, so there is no incentive for Canada to trade internationally. At any other price and quantity combination, there will either be excess supply or excess demand, leading to international trade. Therefore, the correct answer is C.

The Table Below Shows Hypothetical Canadian Domestic Demand and Supply