This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were to open to trade,domestic prices would:

Question

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good.  According to the graph shown,if this economy were to open to trade,domestic prices would:

Quizplus · Accepted Answer

When the economy opens to trade, domestic producers will have to compete with foreign producers who are providing the good at the world price of $23. As a result, domestic producers will increase their price from $16 to $23 to stay competitive. Therefore, the price of all units will increase to $23.

This Graph Demonstrates the Domestic Demand and Supply for a Good,as