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Consider a Market in a Small Country with a Domestic

Question 5

Multiple Choice

Consider a market in a small country with a domestic demand curve of P = 10 - q and a domestic supply curve of P = q.The world price for the good is $8 per unit.If the government bans international trade, what is the amount of surplus forgone?


A) $5
B) $6
C) $7
D) $8
E) $9

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