Consider the market for cars in a small country. Suppose the demand and supply curves for cars have been estimated and are given by
D(p) = 1100 − 50p and S(p) = 200 + 100p
where D(p) is the quantity demanded when the price for cars is p, and similarly, S(p) is the quantity supplied at price p.
NOTE: In your analysis, consider only the areas with non-negative prices.
(a) Suppose the prevailing price is the (free-trade) world price pF T = 4.5. At this price, what is the quantity demanded and the quantity supplied of cars? What are the imports/exports of cars?