The following graph shows the demand for and domestic supply of a good in a country. If the country decides to trade, then at a world price of $1.00 _____.

Question

Quizplus · Accepted Answer

At a world price of $1.00, the domestic quantity supplied is only 30 units, while the domestic demand is 80 units. The difference between the two, which is 50 units, can only be met through imports from outside the country. Therefore, 50 units will be imported.

The Following Graph Shows the Demand for and Domestic Supply