Price (S) Qd Qs 60 230 180 70 200 200 80 170 220 90 150 240 100 140 250 Table 34.6 Pepperland Price ($) Qd Qs 60 430 310 70 420 330 80 410 360 90 400 400 100 390 440 Table 34.7 Land of Submarines
The country of Pepperland exports steel to the Land
of Submarines. Information for the quantity demanded
(Qd) and quantity supplied (Qs) in each country, in a
world without trade, are given in Table 34.6 and Table
34.7.
a. What would be the
quantity in each country in a world without
trade? How can you tell?
b. What would be the equilibrium price and
quantity in each country if trade is allowed to
occur? How can you tell?
c. Sketch two
each country, in the situation before trade.
d. On those diagrams, show the equilibrium price
and the levels of exports and imports in the world
after trade.
e. If the Land of Submarines imposes an antidumping import quota of 30, explain in general
terms whether it will benefit or injure consumers
and producers in each country.
f. Does your general answer change if the Land of
Submarines imposes an import quota of 70?
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