7. Effect of quotas on local consumers and producers The following graph shows the U.S. domestic market for jackets. (? 40 Domestic Demand Domestic Supply 36 32 Price ( World ) 28 24 Price (Quota) 20 PRICE (Dollars) 16 12 24 48 72 96 120 QUANTITY (Millions of jackets) In the absence of foreign trade , the equilibrium price of a jacket is $ At this price, both the domestic quantity demanded and the domestic quantity supplied equal million jackets. Suppose that trade between the United States and China is open and that the United States initially imposes no tariffs or quotas on jackets imported from China. Assume that China has a comparative advantage in producing jackets and charges the world price of $12 per jacket. (Note: Throughout