The following table is domestic supply and demand schedules for a product.Suppose that the world price of the product is $1.

-Refer to the above data.With free trade,that is,assuming no tariff,the outputs produced by domestic and foreign producers respectively would be:

Question

The following table is domestic supply and demand schedules for a product.Suppose that the world price of the product is $1.
 
-Refer to the above data.With free trade,that is,assuming no tariff,the outputs produced by domestic and foreign producers respectively would be:

Quizplus · Accepted Answer

With free trade, the domestic producer will produce 1 unit and the foreign producer will produce 15 units. This is because the foreign producer has a lower marginal cost of production than the domestic producer, so it can produce goods more cheaply.

The Following Table Is Domestic Supply and Demand Schedules for a Product.Suppose