The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4

-In reality international trade is determined solely by comparative advantage and the free market forces of supply and demand.

Question

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4
 
-In reality international trade is determined solely by comparative advantage and the free market forces of supply and demand.

Quizplus · Accepted Answer

While comparative advantage and free market forces do play a role in international trade, there are also a variety of factors that can influence trade, such as tariffs, trade agreements, and government intervention. Therefore, international trade is not determined solely by comparative advantage and the free market forces of supply and demand.

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