In Figures, we assumed that the world price of a good was fixed, and not affected by the quantity of imports a country chooses. But if a country is large relative to the world market, its imports can influence the world price. Suppose the market for good X involves only two large countries (A and B), with supply and demand schedules as shown below:

a. Plot the supply and demand curves for each country.
b. Before international trade, what is the equilibrium price and quantity in each country? For the remaining questions, assume that the two countries can trade in good X.
c. Which country will export good X?
d. What will be the equilibrium world price?
e. What will happen to production and consumption in Country A?
f. What will happen to production and consumption in Country B?
g. What quantity will be exported (and also imported) inequilibrium?

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Country A Countryv B Price per Unit of Good X Quantity Quantity Good X Quantity Quantity (mcasured Demanded Supplied mcasured Demanded Supplicd in dollars) of Good X of Good X n dlars) of Good X of Good X Price per Unit of $10 25 $10 10 16 10 10 4 12