Question

In: Economics

Suppose the current equilibrium point for the market of good for a closed economy is (200,...

Suppose the current equilibrium point for the market of good for a closed economy is (200, $100). Also we know the  ɛ = -2 and n = 1.5 at the equilibrium point. Suppose the economy is now open to trade. Let $110 Pw = $110 .

a) What is the domestic price?

b) What is the size of the export?

Solutions

Expert Solution

a) domestic Price = $110

b) size of export = 70

Rahul Sunny answered 2 years ago
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