Domestic demand for a good is QD = 3000 - 25P. The domestic supply of the good is QS = 20P. Foreign producers can supply any quantity at a price (P) of $30
a. What is the domestic equilibrium price and quantity?
b. At this domestic equilibrium price, how much of the good will be supplied by domestic producers and how much by foreign producers?
a. P = $30 and Q = 2250
b. Domestic producers supply 600 units and foreign producers supply 1650 units.
You might also like to view...
Which of the goals pursued by policymakers in an open economy is desirable because it can reduce the severity of business cycles?
A) exchange-rate stability B) monetary policy independence C) free capital flows D) appreciation of the domestic currency
What is a characteristic of human capital?
A) rivalry B) rapid accumulation C) private ownership D) concavity
If Les can produce two pairs of pants per hour while Eva can produce one pair per hour, then it must be true that:
A. Les has both comparative and absolute advantage in producing pants. B. Les has a comparative advantage in producing pants. C. Les has an absolute advantage in producing pants. D. Eva has a comparative advantage in producing pants.
Historically, consumption spending in the United States has _____
Fill in the blank(s) with the appropriate word(s).