The diagram below shows the demand and supply curves for refrigerators in Canada.
FIGURE 34- 1
-Refer to Figure 34- 1.The free- market equilibrium price of refrigerators in Canada is P0,implying that P0 is the

Question

The diagram below shows the demand and supply curves for refrigerators in Canada.
  FIGURE 34- 1
-Refer to Figure 34- 1.The free- market equilibrium price of refrigerators in Canada is P0,implying that P0 is the

Quizplus · Accepted Answer

The free-market equilibrium price, represented by P0 in the diagram, is determined by the intersection of the demand and supply curves. Since there is no indication of any government intervention or market manipulation, P0 represents the world price, which is the price that would prevail in a perfectly competitive market without any trade barriers.

The Diagram Below Shows the Demand and Supply Curves for Refrigerators