Use the green point (triangle symbol) to shade consumer surplus in Cambodia before China's clothing industry expands. Then use the purple point (diamond symbol) to shade producer surplus. ### Market for Clothing in Cambodia#### Graph Explanation:This graph illustrates the market for clothing in Cambodia, focusing on supply and demand within the domestic market and in relation to world price.- **Axes:** - The vertical axis represents the "Price of Clothing." - The horizontal axis represents the "Quantity of Clothing."- **Lines:** - **Domestic Demand (Blue Line):** This downward-sloping line represents the demand for clothing within Cambodia. As the price decreases, the quantity demanded increases. - **Domestic Supply (Orange Line):** This upward-sloping line indicates the supply of clothing produced domestically. As the price increases, the quantity supplied increases. - **World Price (Black Horizontal Line):** This line represents the world price of clothing, which is constant and intersects both the domestic demand and supply lines.- **Surplus Areas:** - **Consumer Surplus (Green Area):** Represented above the world price line and below the domestic demand line, this area shows the difference between what consumers are willing to pay and what they actually pay. - **Producer Surplus (Purple Area):** Situated below the world price line and above the domestic supply line, this area indicates the difference between what producers are willing to accept for a good and what they actually receive.This graph provides a visual insight into the interactions of domestic supply and demand for clothing in Cambodia and highlights the impact of global pricing on consumer and producer surplus. The image presents a graph representing the market for clothing in Cambodia, illustrating the interaction between domestic demand and supply at the international market level. ### Graph Components:1. **Axes:** - The vertical axis represents the "Price of Clothing". - The horizontal axis represents the "Quantity of Clothing".2. **Curves:** - **Domestic Demand Curve (Blue Line):** A downward sloping line indicates the relationship between price and quantity demanded. As price decreases, the quantity demanded increases. - **Domestic Supply Curve (Orange Line):** An upward sloping line shows the relationship between price and quantity supplied. As price increases, the quantity supplied also increases.3. **Price Line:** - **New World Price (Black Line):** A horizontal line representing the international price level at which Cambodia can trade clothing. It affects the quantities demanded and supplied domestically.4. **Surplus Areas:** - **Consumer Surplus (Green Triangle):** The area above the New World Price line and below the demand curve. It represents the difference between what consumers are willing to pay and what they actually pay. - **Producer Surplus (Purple Triangle):** The area below the New World Price line and above the supply curve. It signifies the difference between what producers are willing to accept and what they actually receive.This diagram reflects the economic concept of supply and demand, demonstrating how Cambodia interacts with the global clothing market and highlighting the benefits realized by consumers and producers through international trade.

We have given a graph of market of clothing in Cambodia. Because Cambodia's domestic market price is less than the world price So Cambodia is an exporter and export (Qs-Qd) amount of quantity and domestic consumer's consumption is Qd and domestic producer spplly Qs amount of good. So the consumer surplus is the area of triangle ABD and domestic producer surplus is the area of triangle BCE.

Answered: Use the green point (triangle symbol)…

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Economics

Use the green point (triangle symbol) to shade consumer surplus in Cambodia before China's clothing industry expands. Then use the purple point (diamond symbol) to shade producer surplus.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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