$ \quad\quad { Country ~X } $
$\begin{array} { | c | c | c | }
\hline Price & Q _ { d d } & Q _ { S d } \
\hline \$ 5.00 & 200 & 400 \
\hline 4.00 & 250 & 350 \
\hline 3.00 & 300 & 300 \
\hline 2.00 & 350 & 250 \
\hline 1.00 & 400 & 200 \
\hline
\end{array}$
The accompanying table gives data for Country $X$. Column 1 of the table is the price of a product. Column 2 is the quantity demanded domestically $\left( Q _ { d d } \right)$, and Column 3 is the quantity supplied domestically $\left( Q _ { s d } \right)$. If Country $X$ opens itself up to international trade, at what world price will it begin importing some units of the product?

Question

$ \quad\quad { Country ~X } $
$\begin{array} { | c | c | c | } 
\hline Price & Q _ { d d } & Q _ { S d } \
\hline \$ 5.00 & 200 & 400 \
\hline 4.00 & 250 & 350 \
\hline 3.00 & 300 & 300 \
\hline 2.00 & 350 & 250 \
\hline 1.00 & 400 & 200 \
\hline
\end{array}$
The accompanying table gives data for Country $X$. Column 1 of the table is the price of a product. Column 2 is the quantity demanded domestically $\left( Q _ { d d } \right)$, and Column 3 is the quantity supplied domestically $\left( Q _ { s d } \right)$. If Country $X$ opens itself up to international trade, at what world price will it begin importing some units of the product?

Quizplus · Accepted Answer

To determine the world price at which Country X begins importing some units, we need to find the domestic equilibrium price and compare it with the world price.

At the domestic equilibrium, quantity demanded domestically is equal to quantity supplied domestically. Therefore, we can plot the data points provided and find the equilibrium price and quantity by identifying the point where the demand and supply curves intersect.

From the table, we can plot the points $(5.00, 200)$, $(4.00, 250)$, $(3.00, 300)$, $(2.00, 350)$ and $(1.00, 400)$ and draw the corresponding demand and supply curves. The point where the two curves intersect is at a price of $3.00, which is the domestic equilibrium price.

If the world price is below $3.00, then the price is lower than the domestic equilibrium price, meaning that the quantity demanded domestically will be less than the quantity supplied domestically. This implies that Country X will be able to export some units of the product.

If the world price is above $3.00, then the price is higher than the domestic equilibrium price, meaning that the quantity demanded domestically will be more than the quantity supplied domestically. This implies that Country X will have to import some units of the product.

Therefore, the answer is: any price above $3.00.

Country X \quad\quad { Country ~X } Country X The Accompanying Table Gives Data for Country

$\quad\quad { Country ~X }$ The Accompanying Table Gives Data for Country