The figure below shows the demand (D) and supply (S) curves of corn syrups. Figure 21.3
- In Figure 21.3,if the world price per gallon is $8,then without quotas:

Question

The figure below shows the demand (D) and supply (S) curves of corn syrups. Figure 21.3 
- In Figure 21.3,if the world price per gallon is $8,then without quotas:

Quizplus · Accepted Answer

Without quotas, the world price will prevail in the domestic market. At a world price of $8 per gallon, the quantity demanded domestically is 50 - 2P = 50 - 2(8) = 34 gallons, and the quantity supplied domestically is 2P = 2(8) = 16 gallons. The difference between quantity demanded and supplied is 34 - 16 = 18 gallons, which must be imported. Therefore, 30 gallons of corn syrup will be imported (option C).

The Figure Below Shows the Demand (D) and Supply (S)