number 26 and 27, please. Price of per box) PA Domestic supply Domestic demand Q

Question

number 26 and 27, please.

Price of per box) PA Domestic supply Domestic demand QT A CT Quantity of roses (boxes) Imports 26. Figure: The Market for Roses) Look at the figure The Market for Roses, Assume that P, is the autarky price and Py is the world price. Consumer surplus without international trade would be area: B)2 C) +X+Z D) W 27, (Figure. The Market for Roses) tok the figure The Market for Roses. Assume that P, autieky price and Pr is the world peice. Consumer surplus with international trade would be area the B) z D) W 28. (Figure The Market for Roses) Look at the Eigure The Market for Rosus. Assume thut Pa is the utarky price and Pw is the weeld price. Produeer suplus without intemational trade would be area

Explanation / Answer

(26) Option (D)

Without trade, relevant market price is PA. Since consumer surplus is area between demand curve and market price, it is denoted by area W.

(27) Option (C)

With trade, relevant market price is PW. Consumer surplus is area beween demand curve and market price, denoted by area (W + X + Z).

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