Answer to Question #130573 in Microeconomics for Yoza

Question

Government decides that it will not implement the excise tax,but will instead open the domestic Bluetooth speaker market to international suppliers. If the world price for Bluetooth speaker is R250 ,what is the equilibrium quantity traded in the domestic market?

Answer 1

If the world price for Bluetooth speaker is R250, then the equilibrium quantity traded in the domestic market will decrease, if the world price is higher than the domestic price.