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Hello I am having trouble with an agriculture economics question, I cannot seem to understand the steps on determining what is the effect on the
Hello I am having trouble with an agriculture economics question, I cannot seem to understand the steps on determining what is the effect on the excess demand curve? Also, what is the effect on the equilibrium international price and trading quantity? I have provided images of the three panel diagram and question below.
All questions are based on the following three panel diagram. A. The U.S. B. International C. The Rest of the World's Motorbike Market Motorbike Market Motorbike Market Price Price Price ($/unit) ($/unit) ($/unit) Soob /Sus pretrade 5000 World price price 12500 2500 Sex 2500 Import: bus 1750 1750 DEX 10 40 70 Quantity Quantity (thousands) (thousands) (thousands) 5us = U.S. supply Sx = Rest-of-world supply of exports S, = Rest of world's supply Dus = U.S demand (S* = 5, - DF) D/ = Rest of world's demand Dm = U.S. demand for imports (Din = Dus - Sus) Consider the above figure, which shows free trade in motorbikes. Assume that consumers in US shift their tastes in favor of motorbikes. What is the effect on excess demand curve? What is the effect on the equilibrium international price and trading quantityStep by Step Solution
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