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Home Market World Market Price, P Foreign Market Price, P 40 40 36- S 36- XS S 32 28- 24- 20- 16- 12- 12- 8

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Home Market World Market Price, P Foreign Market Price, P 40 40 36- S 36- XS S 32 28- 24- 20- 16- 12- 12- 8 - D 8 . D* 6 5 6 Quantity, Q Quantity, Q The left- and right-hand figures given above show, respectively, the Home and Foreign markets for oats. The center figure shows the world oats market, containing Home's import demand (MD) and Foreign's export supply (XS). 1) In the absence of both transportation costs and artificial trade barriers, Home will O A. produce 4 million tons at $32 and import 2 million tons at $24 per ton. O B. produce 4 million tons and import 2 million tons, with both priced at $24 per ton. O C. produce 3 million tons and import 2 million tons, with both priced at $24 per ton. O D. produce 3 million tons and import 2 million tons, with both priced at $32 per ton

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