00:01
For this question, we're given a diagram that shows the canadian market for wine.
00:04
And we're to use the diagram to analyze the effect of imposing an import quota to protect domestic products of wine.
00:13
So the world price is pw.
00:15
What's explained why an import quota of 10 ,000 units, we raise the domestic price to pw plus t and at the world price of pw, canadian consumers demand how many thousand units of wine, how many thousand of which must be imported.
00:33
And the import quota of 10 ,000 units will create how many domestic, will create how many domestic at pw, which drives up the domestic price until demand for imported wine equals dash thousand units.
00:49
So for this question, import quota is 10 ,000 units.
00:58
This will raise the domestic prices to pw plus t.
01:09
So the reason is because the import quota puts a restriction on the quantity of imports.
01:22
So it puts a restriction on the quantity of imports.
01:26
So therefore the shortage of the imports, right, would now lead to the excess.
01:35
So the excess demand will push the domestic prices from pw to pw plus t...