Figure 9-6. The figure applies to the nation of Wales and the good is cheese.

-Refer to Figure 9-6.With trade,the Welsh price of cheese and the Welsh quantity of cheese demanded are

Question

Figure 9-6. The figure applies to the nation of Wales and the good is cheese.
 
-Refer to Figure 9-6.With trade,the Welsh price of cheese and the Welsh quantity of cheese demanded are

Quizplus · Accepted Answer

With trade, the Welsh price of cheese would be P₁, which is lower than the autarky price P₀. This would increase the quantity of cheese demanded by the Welsh from Q₀ to Q₁. Therefore, the correct answer is B, which represents the new equilibrium price and quantity with trade.