Answer the question(s)below based upon the following diagram which depicts country A's market for its importable.

-Refer to the figure above.In free trade A will import

Question

Answer the question(s)below based upon the following diagram which depicts country A's market for its importable.
 
-Refer to the figure above.In free trade A will import

Quizplus · Accepted Answer

In free trade, Country A will import at the world price where its domestic supply curve intersects with the total world demand curve. This occurs at a price of $10/unit. At this price, Country A will import 100 units from Country B. The figure does not provide any information about the quantity of import from Country C. Therefore, option A and B are not correct. Further, the figure shows that Country A's domestic demand at the world price is 120 units, and its domestic supply is 50 units. Therefore, to meet its demand, Country A needs to import 70 units more, which can only come from Country B. Therefore, the correct answer is D.

Answer the Question(s)below Based Upon the Following Diagram Which Depicts