For a small country called Boxland, the equation of the domestic demand curve for cardboard is
where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard.
For Boxland, the equation of the domestic supply curve for cardboard is
where represents the domestic quantity of cardboard supplied, in tons, and again represents the price of a ton of cardboard.
-Refer to Scenario 9-2.Suppose the world price of cardboard is 60 dollars.Then,if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard,
A) domestic producers of cardboard become better off and domestic consumers of cardboard become better off.
B) domestic producers of cardboard become better off and domestic consumers of cardboard become worse off.
C) domestic producers of cardboard become worse off and domestic consumers of cardboard become better off.
D) domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off.
Correct Answer:
Verified
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