$$\begin{array} { c c | c c }
\hline{ \text { Demand } } && { \text { Supply } } \
\hline \mathrm { Q } & \mathrm { P } & \mathrm { Q } & \mathrm { P } \
\hline 12,000 & \$ 0 & 6,000 & \$ 0 \
10,000 & 1 & 7,000 & 1 \
8,000 & 2 & 8,000 & 2 \
6,000 & 3 & 9,000 & 3 \
4,000 & 4 & 10,000 & 4 \
\hline
\end{array}$$
-Refer to the table in the exhibit, which illustrates the domestic supply and demand for tulips in The Netherlands.Suppose the world price of tulips is $4, and no trade restrictions are in place.How many tulips will The Netherlands produce, consume, and export/import?

Question

$$\begin{array} { c c | c c } 
\hline{ \text { Demand } } && { \text { Supply } } \
\hline \mathrm { Q } & \mathrm { P } & \mathrm { Q } & \mathrm { P } \
\hline 12,000 & \$ 0 & 6,000 & \$ 0 \
10,000 & 1 & 7,000 & 1 \
8,000 & 2 & 8,000 & 2 \
6,000 & 3 & 9,000 & 3 \
4,000 & 4 & 10,000 & 4 \
\hline
\end{array}$$
-Refer to the table in the exhibit, which illustrates the domestic supply and demand for tulips in The Netherlands.Suppose the world price of tulips is $4, and no trade restrictions are in place.How many tulips will The Netherlands produce, consume, and export/import?

Quizplus · Accepted Answer

At a world price of $4, the quantity demanded is higher than the quantity supplied in the domestic market in the Netherlands. Therefore, the Netherlands will import the difference between the quantity demanded and supplied, which is 6,000 tulips (12,000 – 6,000 = 6,000). The Netherlands will produce the quantity where the domestic supply curve intersects the horizontal axis (P = 0), which is 10,000 tulips. The quantity consumed is the difference between the quantity demanded and the quantity exported, which is 4,000 tulips. Therefore, the Netherlands will produce and consume 10,000 and 4,000 tulips, respectively, and export 6,000 tulips.

-Refer to the Table in the Exhibit, Which Illustrates the