Suppose a small island nation imports sugar for its population at the world price of $1,500 per ton. The domestic market for sugar is shown below. With no subsidy, the equilibrium price of sugar is ________ per ton, and the equilibrium quantity is ________ tons per day.
A)$1,000; 12
B)$1,000; 8
C)$1,500; 12
D)$1,500; 8

Question

Suppose a small island nation imports sugar for its population at the world price of $1,500 per ton. The domestic market for sugar is shown below.  With no subsidy, the equilibrium price of sugar is ________ per ton, and the equilibrium quantity is ________ tons per day.
A)$1,000; 12 
B)$1,000; 8 
C)$1,500; 12 
D)$1,500; 8

Quizplus · Accepted Answer

With no subsidy, the price of sugar equals the world price of sugar, $1,500 per ton. At that price, the quantity demanded is 8 tons per day.

Suppose a Small Island Nation Imports Sugar for Its Population