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The world price for watermelons is $3 each. In the United States, the price for watermelons is $6 each. What will happen to the U.S.
The world price for watermelons is $3 each. In the United States, the price for watermelons is $6 each. What will happen to the U.S. market for watermelons when imports are allowed? The price of watermelons in the United States will fall to $3. The world price will increase to the equilibrium price of the domestic market. The quantity supplied by domestic sellers will exceed the domestic quantity demanded. Foreign buyers will make up the difference between domestic supply and domestic demand
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