This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,if the economy were open to free trade,the domestic quantity supplied would:

Question

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good.  According to the graph shown,if the economy were open to free trade,the domestic quantity supplied would:

Quizplus · Accepted Answer

The domestic supply curve (DSC) intersects the world price at a quantity of 815. However, with a tariff, the domestic price increases and the quantity supplied increases to 1000. If free trade were allowed, the domestic price would fall back to the world price, thus reducing the quantity supplied to 250 (where the DSC intersects the world price).

This Graph Demonstrates the Domestic Demand and Supply for a Good,as