Suppose Russia Produces Caviar That Sells for $15 a Can

question 218

Multiple Choice

Suppose Russia produces caviar that sells for $15 a can, and the United States produces it at a price of $20 per can. If all caviar were the same and there are no barriers to trade, then:

• A) consumers would buy all of the U.S.-produced caviar.
• B) Russians would see the price of their caviar drop due to U.S. competition.
• C) the equilibrium price of caviar would be between $15 and $20.
• D) Americans would see the price of caviar rise.

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