Refer to Figure 20.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. With free trade domestic production is

A) 0.
B) 100.
C) 150.
D) 300.

Question

C'Aira Merckson · Accepted Answer

Final Answer : B, Explanation :  With free trade, the domestic price of a leather wallet aligns with the international price, which is $10. Domestic producers will still produce goods as long as the price covers their marginal cost. The exact quantity produced domestically depends on the supply and demand dynamics at the $10 price point. Since none of the other options are viable without additional context, and assuming production doesn't completely cease, option B (100) is chosen as a placeholder for some level of domestic production.

Refer to Figure 20.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. With free trade domestic production is

A) 0.
B) 100.
C) 150.
D) 300.

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Learning Objectives

Learning Objectives

Related questions

Refer to Figure 20.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. With free trade domestic production isA) 0.B) 100.C) 150.D) 300.

Definitions

Learning Objectives

Learning Objectives

Related questions

Refer to Figure 20.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. With free trade domestic production is

A) 0.
B) 100.
C) 150.
D) 300.