The before-trade domestic price of pepper in India is $15 per tonne. The world price of pepper is $25 per tonne. India is a price taker in the pepper market. Given this information, answer the following questions.
a. Will India import or export pepper?
b. What will the price of pepper be in India if free trade is allowed?
c. Who will benefit from free trade in this case?
d. Who will lose from free trade?
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