Figure 912 Price Domestic Supply World Price 18 Domestic Dem

Figure 9-12 Price Domestic Supply World Price 18 Domestic Demand 400 800 1200 1600 2000 2400 2800 Quantiy er to Figure 9-12. With trade, domestic production and domestic consumption, respectively, are a. 1,200 and 800. b. 1,600 and 800. c. 800 and 1,200. d. 800 and 1,600.

Solution

At world price the intersection of maximum quantity with the supply curve shows the production that is done in a country and the minimum quantity intersected with world price shows the consumption.

So from the graph it is clear that the maximum quantity supplied at world price is 1600 which is domestic production and the minimum quantity supplied at world price is 800 which is domestic consumption.

Answer: 1600 and 800