The demand for DVD players in a country is given by D = 300 - 0.2P,where P is the price of a DVD player.Supply by domestic producers is given by S = 100 + 0.8P.The world price of a DVD player equals $100.In equilibrium,when this economy is closed to trade,domestic DVD player production equals __________,and when this economy opens to trade,domestic DVD player production equals _________.

Question

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In a closed economy, set D = S: 300 - 0.2P = 100 + 0.8P, solving gives P = 200, and S = 260. In an open economy, domestic production is determined by the world price: S = 100 + 0.8(100) = 180.

The Demand for DVD Players in a Country Is Given