-The above figure shows the U.S.market for 1 carat diamonds.With free trade,U.S.production of diamonds is equal to ________ diamonds.When the quota illustrated in the figure is in place,U.S.production is equal to ________ diamonds.

Question

Quizplus · Accepted Answer

With free trade, U.S. production of diamonds is at the point where the domestic supply curve intersects the world price line, indicating 100,000 diamonds. When the quota is in place, the supply is restricted, leading to an increase in domestic production to meet some of the demand that was previously met by imports, resulting in a production of 300,000 diamonds.

-The Above Figure Shows the U