00:01
Let's go over this question.
00:03
We're going to draw out the supply and demand curves.
01:02
At the price of 15 cents, quantity demanded is 9 ,300.
01:09
At 30 cents, it's 8 ,440.
01:29
Then at 45 cents, it's 7 ,580.
01:47
At 60 cents, we have 6 ,720.
01:59
Then we're just going to connect these points.
02:02
This is our demand curve.
02:04
Then for the supply curve, at 15 cents, quantity supplied is 7 ,580.
02:11
At 30 cents, it's 8 ,400.
02:25
So this is going to overlap with this point here.
02:48
So that's 8 ,440.
02:55
So then at 45 cents, we have 9 ,300.
03:07
At 60 cents, we have 10 ,160.
03:24
So that's our supply curve.
03:31
Identify the equilibrium price and quantity without trade.
03:33
The equilibrium price is where they cross.
03:36
So it's going to be right here.
03:44
So our equilibrium price is 30 cents and the quantity is 8 ,440.
04:04
If the price at which apples are traded in the world market is 50 cents per apple higher than the domestic price, what is the world price? so the domestic price at equilibrium is 30.
04:16
So we're going to add 15 to 30.
04:20
That gives you 45 cents.
04:26
So this is going to be the world price.
04:31
So we're going to draw a dashed line representing the world price.
04:52
If the u .s.
04:53
Allows international trade, how many apples will be produced domestically in the u .s.? how many apples will be purchased in the u .s.? so it's allowing trade.
05:04
We are now at the world price.
05:11
So then we need to see what quantity supplied and quantity demanded at this price is.
05:22
So at 45 cents, the quantity supplied domestically is 9 ,300.
05:47
And then quantity demanded at this price is 7 ,580 million pounds per year...