Problem
Consider the market for widgets. Widgets can be produced in the United States or abroad. Assume that U.S. consumers wish to buy the least expensive widgets possible. However, if widgets from all countries cost the same, consumers would prefer to buy domestically.
|
Price
|
Quantity Demand
|
Quantity SuppliedDomestically
|
Quantity Supplied by Importers if Trade Is Allowed
|
|
$6
|
13,000
|
2,000
|
8,000
|
|
$7
|
12,000
|
4,000
|
8,000
|
|
$8
|
11,000
|
6,000
|
8,000
|
|
$9
|
10,000
|
8,000
|
8,000
|
|
$10
|
9,000
|
9,000
|
8,000
|
|
$11
|
8,000
|
10,000
|
8,000
|
If international trade is allowed, what is the equilibrium price?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.