Suppose that the equations S = 2P and D = 6 - P represent a small country's home supply and home demand curves. Which of the following is the equilibrium price in autarky?
A) $2
B) $4
C) $6
D) $8

Question

Quizplus · Accepted Answer

Equilibrium price is the price at which quantity supplied equals quantity demanded. In autarky, there is no international trade, so the equilibrium price is the price at which domestic supply equals domestic demand. Substituting the given equations into the equilibrium condition, we get:2P = 6 - P3P = 6P = 2Therefore, the equilibrium price in autarky is $2.

Suppose That the Equations S = 2P and D =