00:01
Let's talk about why if canada reduces its restrictions on imports, this can actually benefit canadian exporters, even if other countries don't lower their import restrictions on canadian exports.
00:13
So let's take this scenario where we have our market.
00:17
And our price in the canadian free market is this price c, which i have right here, which is where a canadian domestic supply is equal to canadian domestic demand.
00:31
So the whole reason why canada would decide to import in the first place would be if the world price that they can get from foreign markets is lower than the price domestically.
00:41
Because consumers would much rather pay this lower price, so they would rather import.
00:46
So what this does is if we do choose to import, this is going to create a shortage at this price if we were to have this price domestically.
00:57
Because less people would want to supply for this lower price and more people would want to buy at this lower price.
01:04
So how we fuel this shortage at this world price is we import this discrepancy.
01:12
So this quantity demanded minus quantity supply.
01:21
That's going to be our quantity of imports.
01:23
Right.
01:24
So why would canada have restrictions on imports? in the first place, that would be to protect consumers, right, who want to sell this higher price for a higher profit, who want to sell more than they would at this world price.
01:38
But if they reduce regulations, right, on imports, and they allow the world price to rain, and they allow imports to come in, then this can actually still benefit canadian exporters...