question archive A vegetable fiber is traded in a competitive world market, and the world price is $9 per pound
A vegetable fiber is traded in a competitive world market, and the world price is $9 per pound
Subject:EconomicsPrice:2.88 Bought3
A vegetable fiber is traded in a competitive world market, and the world price is $9 per pound. Unlimited quantities are available for import into the United States at this price. The U.S. domestic supply and demand for various price levels are shown below.
| Price | U.S. Supply (million lbs.) | U.S. Demand (million lbs.) |
|---|---|---|
| 3 | 2 | 34 |
| 6 | 4 | 28 |
| 9 | 6 | 22 |
| 12 | 8 | 16 |
| 15 | 10 | 10 |
| 18 | 12 | 4 |
a. What is the price elasticity of supply at $9? At $12?
b. In a free market, what will be the U.S. price and level of fiber imports?
