Question

Answer the next question (s) on the basis of the following domestic supply and demand schedules for a product. Suppose that the world price of the product is $1.

Quantity supplied (domestic) 12,10,7,4,1. Price $5,4,3,2,1

Quantity demanded (domestic) 2,4,7,11,16

I) referring to the above data, if this nation were entirely closed to international trade, what is the equilibrium price and quantity?

Answer 1

Equilibrium price is $3; equilibrium quantity is 7