The following figure shows the demand curve, D, and supply curve, S, of ballpoint pens in Lithasia. The world price of pens is $2.

-Refer to the figure above.What is the domestic demand for pens in Lithasia after the economy opens up to free trade?

Question

The following figure shows the demand curve, D, and supply curve, S, of ballpoint pens in Lithasia. The world price of pens is $2.
 
-Refer to the figure above.What is the domestic demand for pens in Lithasia after the economy opens up to free trade?

Quizplus · Accepted Answer

After the economy opens up to free trade, the domestic price of pens will also be $2. At this price, the domestic demand curve intersects with the world supply curve at a quantity demanded of 16 units. Therefore, the domestic demand for pens is 16 units, as shown by point E in the graph.

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