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Suppose an Exporter Has an Upward-Sloping Supply Curve

Question 45

Multiple Choice

Suppose an exporter has an upward-sloping supply curve.If a change in import demands in other countries leads it to a decrease in exports,other things equal,what would we expect to occur to prices?


A) The world price of the commodity will tend to be lower than before the change.
B) The domestic price of the commodity will rise.
C) The domestic price of the commodity will tend to be higher, but the world price will not change.
D) The domestic price of the commodity will be higher than the price in foreign countries, if transportation costs are positive.

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