The accompanying table gives domestic supply and demand schedules for a product. Suppose that the world price of the product is $1. $\begin{array}{|c|c|c|}
\hline\text { Ouantity }&&\text { Ouantity }\
(\text { Supplied }&&\text { Demanded }\
\hline \text { (Domestic) } & \text { Price } & \text { (Domestic) } \
\hline 12 & \$ 5 & 2 \
\hline 10 & 4 & 4 \
\hline 7 & 3 & 7 \
\hline 4 & 2 & 11 \
\hline 1 & 1 & 16 \
\hline
\end{array}$ If this nation were entirely closed to international trade, equilibrium price and quantity would be

Question

Quizplus · Accepted Answer

In a closed economy, equilibrium occurs where supply equals demand. Looking at the table, we can see that at a price of $3, the domestic quantity supplied matches the domestic quantity demanded at 7 units. Therefore, the equilibrium price and quantity without international trade would be $3 and 7 units, respectively. Option D is the only choice that matches this.

The Accompanying Table Gives Domestic Supply and Demand Schedules for a Product