The following table indicates the dollar price of libras,the currency used in the hypothetical nation of Libra.Assume that a system of flexible exchange rates is in place.

-Refer to the above table.The equilibrium dollar price of libras is:
A) $5
B) $4
C) $3
D) indeterminate.

Question

The following table indicates the dollar price of libras,the currency used in the hypothetical nation of Libra.Assume that a system of flexible exchange rates is in place.
 
-Refer to the above table.The equilibrium dollar price of libras is:
A) $5 
B) $4 
C) $3 
D) indeterminate.

Quizplus · Accepted Answer

The equilibrium price is where the supply and demand curves intersect. From the table, we can see that at a dollar price of $3, there is an equilibrium of 600 libras being supplied and 600 being demanded. Therefore, the equilibrium dollar price of libras is $3.

The Following Table Indicates the Dollar Price of Libras,the Currency