Below is the total market demand and supply of wine for France and Germany.Quantities are in millions of litres per month.

-Refer to the information above to answer this question.Assume that France and Germany enter into a free trade agreement (and there are no extra transportation costs,etc. )what are the equilibrium price and quantity of wine?

Question

Below is the total market demand and supply of wine for France and Germany.Quantities are in millions of litres per month.
 
-Refer to the information above to answer this question.Assume that France and Germany enter into a free trade agreement (and there are no extra transportation costs,etc. )what are the equilibrium price and quantity of wine?

Quizplus · Accepted Answer

To find the equilibrium price and quantity of wine, we need to locate the point where the demand and supply curves intersect. 
At a price of €7, the combined quantity demanded by France and Germany is 21 million litres per month, which is equal to the combined quantity supplied. This is the equilibrium price and quantity. 
Therefore, the correct answer is (C) €7 and 21 million litres per month.

Below Is the Total Market Demand and Supply of Wine