The following figure shows the demand curve, D, and the supply curve, S, for calculators in Barylia in four different scenarios. Barylia is open to free trade.

-Refer to the figure above.At a world price of $5,in which scenario(s)does Barylia see its domestic quantity demanded increase?

Question

The following figure shows the demand curve, D, and the supply curve, S, for calculators in Barylia in four different scenarios. Barylia is open to free trade.
 
-Refer to the figure above.At a world price of $5,in which scenario(s)does Barylia see its domestic quantity demanded increase?

Quizplus · Accepted Answer

At a world price of $5, Barylia sees its domestic quantity demanded increase in scenarios (3) and (4) because in these scenarios, the world price is lower than the domestic equilibrium price, leading to an increase in imports and thus an increase in the total quantity demanded domestically.

The Following Figure Shows the Demand Curve, D, and the Supply