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Figure 1 illustrates the equilibria in autarky and in free trade in country A's market for cars. Country A is considered to be a small

Figure 1 illustrates the equilibria in autarky and in free trade in country A's market for cars. Country A is considered to be a small exporter. Note that D and S denote the demand and the supply of cars in country A respectively while PA and PW denote the price of cars (in thousands of $US) in autarky and in free trade, respectively.

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Figure 1 Price (in thousands of $US) S Pw=20 PA=15 -_ _ D 20 30 Cars (in thousands)

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