The diagram below shows the domestic demand and supply curves for denim jeans in Canada. The prevailing world price is P W . Assume that all jeans are identical.
FIGURE 34- 2
-Refer to Figure 34- 2. In the presence of free international trade, Canada's consumption of denim jeans will be the quantity

Question

The diagram below shows the domestic demand and supply curves for denim jeans in Canada. The prevailing world price is P W . Assume that all jeans are identical.
  FIGURE 34- 2
-Refer to Figure 34- 2. In the presence of free international trade, Canada's consumption of denim jeans will be the quantity

Quizplus · Accepted Answer

In the presence of free international trade, the consumption of denim jeans in Canada will be at the quantity where the world price intersects the demand curve, which is typically the highest quantity available, Q5.

The Diagram Below Shows the Domestic Demand and Supply Curves