The following figure shows the domestic U.S.market for bananas and the global market for bananas.The domestic supply curve is given by SUPPLY_US.With free trade,the equilibrium output in the U.S.market is Q.The import quota imposed by the government is equal to 0A.
Figure 10-5
-Refer to Figure 10-5.The price of bananas in the global market prior to the imposition of an import quota is _____.

Question

The following figure shows the domestic U.S.market for bananas and the global market for bananas.The domestic supply curve is given by SUPPLY_US.With free trade,the equilibrium output in the U.S.market is Q.The import quota imposed by the government is equal to 0A.
Figure 10-5

The following figure shows the domestic U.S.market for bananas and the global market for bananas.The domestic supply curve is given by SUPPLY<sub>US</sub>.With free trade,the equilibrium output in the U.S.market is Q.The import quota imposed by the government is equal to 0A. Figure 10-5 -Refer to Figure 10-5.The price of bananas in the global market prior to the imposition of an import quota is _____. A) P<sub>3</sub> B) P<sub>1</sub> C) P<sub>4</sub> D) P<sub>2</sub>

-Refer to Figure 10-5.The price of bananas in the global market prior to the imposition of an import quota is _____.

Quizplus · Accepted Answer

The price of bananas in the global market prior to the imposition of an import quota is P1. This is because the import quota restricts the quantity of bananas that can be imported, which in turn drives up the price of bananas in the global market.

The Following Figure Shows the Domestic U