Refer to Figure 35.6:
If S₁ represents the U.S.domestic supply of a good, what does S₂ most likely represent?

Question

Refer to Figure 35.6: If S₁ represents the U.S.domestic supply of a good, what does S₂ most likely represent?

Quizplus · Accepted Answer

SS1U1B12S1U1B0 represents U.S. supply under quota-restricted trade, as it shows a lower quantity of domestic supply (SS1U1B12) compared to the domestic supply under free trade (SS1U1B11S1U1B0). This suggests that the U.S. government has imposed a restriction on the amount of the good that can be imported from foreign countries, limiting the competition faced by domestic producers and allowing them to increase their supply.