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equilibrium price and quantity

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Quantity supply (domestic) Price Quantity demand (domestic)
12 $5 2
10 4 4
7 3 7
4 2 11
1 1 16
a. If this nation were entirely closed to international trade, what are equilibrium price and quantity?
b. If this nation were open to international trade, and world price of $1 prevailed, what are price and quantity sold for this product?
c. With free trade (no tariff), what are the output produced by domestic and foreign producers respectively?
d. with a $1 per unit tariff, what are the price and total quantity sold?

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Solution Summary

The equilibrium price and quantity are embedded.

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This question is better solved if you draw a graph. That will make life easier. See the attached graph for subsequent description.

The red line is the demand curve, and the blue line is the domestic supply curve.

(a) In the absence of trade the ...

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