The table below represents the demand and supply schedules for cement in Canada and
United States. (Assume these are only 2 countries trading in cement).
Price per
Quantity
Quantity
50 kg bag demanded in supplied in
Quantity
demanded in
Quantity
supplied in
of cement
Canada
Canada
United States
United States
(in US$)
('000 bags)
('000 bags)
('000 bags)
('000 bags)
80
200
20
200
50
160
170
40
170
100
240
140
60
140
140
320
120
80
120
160
400
100
100
100
180
480
80
120
80
200
560
60
140
60
220
640
40
160
40
240
a)
If there is no trade between these two countries, what are the equilibrium price and
the equilibrium quantity in Canada?
b)
If there is no trade between these countries, what are the equilibrium price and the
equilibrium quantity in the United States?
c)
If Canada and the United States trade with each other, what will be the equilibrium
price in the world for cement?
d)
If Canada and the United States trade with each other, which country will export
cement and how much?