Now add Foreign, which has a demand curve D* = 60 - 10P and a supply curve

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Now add Foreign, which has a demand curve D* = 60 - 10P and a supply curve S* = 20 + 10P.

a. Derive and graph Foreign’s export supply curve and find the price of books that would prevail in Foreign in the absence of trade.

b. Now allow Foreign and Home to trade with each other, at zero transportation cost. Find and graph the equilibrium under free trade. What is the world price?

What is the volume of trade?

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International Economics Theory And Policy

ISBN: 9781292409719

12th Edition

Authors: Paul Krugman , Maurice Obstfeld, Marc Melitz

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Question Posted: Feb 27, 2024 03:04 AM

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Now add Foreign, which has a demand curve D* = 60 - 10P and a supply curve

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International Economics Theory And Policy

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