(Figure: Market for Engines) According to the figure, if there is international trade in this market, and the world price of engines is $1,000, the quantity demanded is _____, and domestic suppliers will sell _____ units to domestic consumers.

Question

(Figure: Market for Engines) According to the figure, if there is international trade in this market, and the world price of engines is $1,000, the quantity demanded is _____, and domestic suppliers will sell _____ units to domestic consumers.
(Figure: Market for Engines) According to the figure, if there is international trade in this market, and the world price of engines is $1,000, the quantity demanded is _____, and domestic suppliers will sell _____ units to domestic consumers. A) 400; 400 B) 400; 600 C) 600; 400 D) 600; 600

Quizplus · Accepted Answer

If the world price of engines is $1,000, it is below the domestic equilibrium price of $1,500. This means that the quantity demanded will increase to 400 units (point B). Domestic suppliers will only be able to sell their production at the world price, so they will sell 400 units as well, which is the quantity demanded. Therefore, the correct answer is option A.

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