The figure shows the US market for fliplops With no internat

The figure shows the U.S. market for flip-lops. With no international trade, the price in the United States for flip-flops is With international trade, the price in the united state for flip-flop.

Solution

The correct answer is option A which is $14, $12. The fig. shows the U.S market for flip-flops. With no international trade, the price in the United States for flip-flops is $14. With international trade, the price in the United States for flip-flops is $12. The graph shows that when there is niether rise in demand nor rise in supply it is an equilibrium wage rate. In the price and quantity graph, the equilibrium wage rate is shown at $14 which is price per flip flop which shows no international trade. The graph shows world price which shows international trade price that shows demand and supply price to be $12.