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Problem 1. Assume that both A and B are big countries. Derive the autarky equilibrium prices in both country A (PA) and country B (PB)

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Problem 1. Assume that both A and B are big countries. Derive the autarky equilibrium prices in both country A (PA) and country B (PB) as well as the free trade equilibrium price (PFT) using the following demand and supply conditions: DA : P = 500 - 2Q SA : P = 100 + 4Q DB : P = 400 - 6Q SB : P = 250 + 5Q Compute the quantity traded under free trade. Is it more or less than in autarky

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