The following graph shows the domestic demand for and supply of oranges in Zambia. The world price (Pw) of oranges is $530 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demand- by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with internationa trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. PRICE (Dollars per ton) 090 850 810 770 730 650 050 010 570 530 Domestic Demand Domestic Supply ?

The following graph shows the domestic demand for and supply of oranges in Zambia. The world price (Pw) of oranges is $530 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demand- by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with internationa trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. PRICE (Dollars per ton) 090 850 810 770 730 650 050 010 570 530 Domestic Demand Domestic Supply ?

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 4CQQ

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