The first panel in the following figure shows the domestic demand (D)and supply (S)curves of Columbian coffee and the second panel shows the import demand and export supply of Columbian coffee in the international market. Figure 20.1 Refer to Figure 20.1.The autarky equilibrium price of coffee in Columbia is:

Question

The first panel in the following figure shows the domestic demand (D)and supply (S)curves of Columbian coffee and the second panel shows the import demand and export supply of Columbian coffee in the international market. Figure 20.1  Refer to Figure 20.1.The autarky equilibrium price of coffee in Columbia is:

Quizplus · Accepted Answer

In the first panel, the intersection of the demand and supply curves results in an autarky equilibrium price of $10. This price is then used as the world price in the second panel, where we see that at a price of $10, Columbian Coffee exports 20 million bags and imports 4 million bags.

The First Panel in the Following Figure Shows the Domestic