(Figure: Market for Engines) According to the figure, if there is international trade in this market, and the world price of engines is $800, buyers and sellers will make exchanges at a price of _____ because sellers will refuse to sell for _____ than the world price.

Question

(Figure: Market for Engines) According to the figure, if there is international trade in this market, and the world price of engines is $800, buyers and sellers will make exchanges at a price of _____ because sellers will refuse to sell for _____ than the world price.
(Figure: Market for Engines) According to the figure, if there is international trade in this market, and the world price of engines is $800, buyers and sellers will make exchanges at a price of _____ because sellers will refuse to sell for _____ than the world price. A) $600; less B) $600; more C) $800; less D) $800; more

Quizplus · Accepted Answer

When the world price of engines is $800, sellers in the domestic market will only sell their engines at this price because they can receive a higher price by selling in the international market. Buyers in the domestic market will have to pay this price to acquire engines, as there is no domestic production at a lower price. Therefore, the price in the domestic market will be equal to the world price of $800.

(Figure: Market for Engines) According to the Figure, If There