00:01
Okay, so we're going to be looking at the analysis of international trade.
00:04
Why would government actually intervene in the case of international trade? so the first aspect of the analysis looks at the argument that is provided for infant industries, which is a very strong and powerful argument.
00:26
If we're going to be looking at this analysis from starting, off with the price and the quantity is, i beg your pardon, we're going to start off with the price and the quantity for the country.
00:47
So for the particular economy, let me just take this back.
00:52
So we're basically looking at initially, if there is not going to be an international trade, then we are going to find an equilibrium level.
01:00
As a point e, we are looking at the supply of the economy.
01:07
So what happens is we'll see that the price is a bit higher than when we have international trade.
01:16
International trade brings in products from into the country.
01:22
So obviously there is going to be an increase in the quantity available of that particular product.
01:29
So the prices are actually going to be lower, although the available goods will also be high, and the new equilibrium will be arrived at point e1 in this particular instance.
01:43
So what it does is if you're looking at the operations of a business, if we assume that a business was operating at a level where it was having normal profits, i mean, no more profit.
02:01
You'll notice that the quantities, an individual firm would produce was a qc at that particular price, pc, where it would earn normal profits, marginal cost equal to marginal revenue...