Suppose that the world price of eggs is $1 a dozen,Canada does not trade internationally,and the equilibrium price of eggs in Canada is $3 a dozen.Then Canada begins to trade internationally. The price of eggs in Canada ________.Canadian consumers buy ________ eggs.

Question

Quizplus · Accepted Answer

C) falls; moreWhen Canada begins to trade internationally, the domestic price of eggs will adjust to the world price, which is lower ($1 vs. $3). Therefore, the price of eggs in Canada falls. With the lower price, Canadian consumers will buy more eggs because they are cheaper than before.

Suppose That the World Price of Eggs Is $1 a Dozen,Canada