What is the effect on the us domestic demand andor supply


Consider again in given Figure, which shows free trade in motorbikes. Assume that U.S. productivity in producing motorcycles increases.

What is the effect on the U.S. domestic demand and/or supply curve(s)?

What is the effect on the U.S. demand-forimports curve? What is the effect on the equilibrium international price?

1284_The effects of trade on Production, Consumption and Price shown with demand and Supply Curves.jpg

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