The Following Figure Shows the Demand Curve,D,and the Supply Curve,S,for

question 171

Essay

The following figure shows the demand curve,D,and the supply curve,S,for soap in Barylia.

a)What is the consumer surplus,producer surplus,and total surplus in Barylia if the nation does not participate in free trade?
b)If the world price of soap is $2 per unit,will Barylia import or export soap?
c)What is the change in consumer surplus,producer surplus,and total surplus if Barylia participates in free trade?

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Definitions:

Land

Immovable property comprising the ground, along with any natural or artificial structures on it, not including movable assets.

Manufacturing Facility

A physical location equipped with machinery and equipment for producing goods and products.

Equipment Modifications

Changes or upgrades made to machinery or equipment to improve performance or efficiency.

Expansion Project

A business initiative aimed at increasing the scale of its operations, typically through new product lines or geographic markets.