We find that the world price of sugar is 20 cents a pound,the U.S.does not trade internationally,and the U.S.equilibrium price of sugar is 30 cents a pound.If the U.S.begins to trade internationally,the price of sugar in the U.S.________ to the world price and U.S.consumers buy ________ sugar.

Question

Quizplus · Accepted Answer

When the U.S. begins to trade internationally, the domestic price will adjust to the world price. In this case, the world price is lower at 20 cents a pound than the U.S. equilibrium price of 30 cents a pound. Therefore, the price in the U.S. will fall to match the world price. This will make sugar cheaper for U.S. consumers, so they will likely buy more sugar.

We Find That the World Price of Sugar Is 20