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

Question

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

Quizplus · Accepted Answer

In the presence of free international trade, Canada will produce at the quantity where the domestic price equals the world price. This is at point Q1 on the graph.

The Diagram Below Shows the Domestic Demand and Supply Curves