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In: Economics

Use a well-labeled basic supply and demand graph below to illustrate the market for cheese in...

  1. Use a well-labeled basic supply and demand graph below to illustrate the market for cheese in California with and without free trade. Please assume that the world price of cheese is below the domestic equilibrium price so we know California will import cheese.
  1. On your graph, indicate the quantities of cheese produced in California with and without trade. Also label the quantities of cheese consumed in California with and without trade and the pounds of cheese imported to Californi

  1. Label the area that represent the consumer surplus with free trade (“CS”). Relative to the domestic market alone, has consumer surplus increased or decreased?

  1. Shade in the area that represents the producer surplus with free trade. Relative to the domestic market alone, has producer surplus increased or decreased?

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Expert Solution

Rahul Sunny answered 2 years ago
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