Suppose the domestic supply (QSU.S.) and demand (QDU.S) for bicycles in the United States is represented by the following set of equations:QSU.S. = 2PQDU.S. = 200 - 2P.Demand (QD) and supply (QS) in the rest of the world is represented by the equations:QS = PQD =160 - P.Quantities are measured in thousands and price, in U.S. dollars.After the opening of free trade between the United States and the rest of the world
A. neither the United States nor the rest of the world gain from trade.
B. both countries gain from trade, but the United States gains more than the rest of the world.
C. the net change in total surplus in the United States is zero, but the rest of the world gains.
D. both countries gain from trade, but the rest of the world gains more than the United States.
Answer: D
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