(Figure: The Domestic Supply and Demand for Recreational Vehicles (RVs) in the United States) Use Figure: The Domestic Supply and Demand for Recreational Vehicles (RVs) in the United States. Suppose the world price equals $50,000, and there is free trade. The United States would _____ Recreational Vehicles.

Question

(Figure: The Domestic Supply and Demand for Recreational Vehicles (RVs) in the United States) Use Figure: The Domestic Supply and Demand for Recreational Vehicles (RVs) in the United States. Suppose the world price equals $50,000, and there is free trade. The United States would _____ Recreational Vehicles.
(Figure: The Domestic Supply and Demand for Recreational Vehicles (RVs) in the United States) Use Figure: The Domestic Supply and Demand for Recreational Vehicles (RVs) in the United States. Suppose the world price equals $50,000, and there is free trade. The United States would _____ Recreational Vehicles. A) import 6 million B) export 6 million C) export 2 million D) import 2 million

Quizplus · Accepted Answer

At the world price of $50,000, the domestic quantity demanded is 6 million RVs and the domestic quantity supplied is 2 million RVs. This means that there is excess demand for RVs in the United States. With free trade, the United States can export the excess supply of 4 million RVs to other countries. Therefore, the United States would export 6 million RVs.

(Figure: the Domestic Supply and Demand for Recreational Vehicles (RVs)