The diagram below shows the domestic demand and supply curves in the market for newsprint in Paperland.
FIGURE 33- 5
-Refer to Figure 33- 5.If Paperland engages in trade and the world price is PA,the residents of Paperland will consume units of newsprint.

Question

The diagram below shows the domestic demand and supply curves in the market for newsprint in Paperland.
  FIGURE 33- 5
-Refer to Figure 33- 5.If Paperland engages in trade and the world price is PA,the residents of Paperland will consume units of newsprint.

Quizplus · Accepted Answer

At the world price of PA, domestic producers will supply Q1 units of newsprint, and domestic consumers will demand Q2 units. The difference between domestic demand and domestic supply (Q2 - Q1) is the amount of newsprint that Paperland will import.

The Diagram Below Shows the Domestic Demand and Supply Curves