The Figure Below Shows the Demand (D) and Supply (S)

question 2

Multiple Choice

The figure below shows the demand (D) and supply (S) curves of corn syrups.
Figure 20.3

-In Figure 20.3, what are the equilibrium price and quantity in the absence of trade?

• A) $8, 50 gallons
• B) $12, 35 gallons
• C) $8, 35 gallons
• D) $4, 20 gallons
• E) $16, 50 gallons

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Definitions:

Triangle Arbitrage

A riskless profit strategy that takes advantage of discrepancies between three foreign currencies in the forex market.

Spot Market

A market where financial instruments or commodities are traded for immediate delivery, as opposed to future or forward delivery.

Forward Market

A market in which participants agree to trade a financial instrument or physical commodity for future delivery at a specified price.

Absolute Purchasing Power Parity

A theory stating that identical goods and services in different countries should cost the same when priced in a common currency.