Question

1) Equilibrium is attained when S=D. This will be the intersection of S and D curves. Equilibrium Price=12, Equilibrium quantity=8 million

2) Equilibrium is attained when S=D. Equilibrium Price=12, Equilibrium quantity=8 million

3) In this case, US equilibrium price is higher than that of ROW, it will import from ROW. ROW will be exporting.

4) US demand schedule can be derived by subtraction S from D schedule. ROW supply schedule can be derived by subtraction D from S schedule.

 P S* D* 0 0 32 1 0 30 2 0 28 3 0 26 4 0 24 5 0 21 6 0 18 7 0 15 8 2 12 9 4 9 10 6 6 11 8 3 12 10 0 13 12 0 14 13 0 15 14 0 16 15 0

(Negative quantities in S* and D* schedules are shown as 0)

Equilibrium is attained at (quantity =6 million and price =10)

5)

Refer to the table given in question,

ROW demanded quantity (at P=10)=3 million

ROW supplied quantity (at P=10)=quantity produced=9 million

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