Suppose an Exporter Has an Upward-Sloping Supply Curve

question 105

Multiple Choice

Suppose an exporter has an upward-sloping supply curve.If a change in import demands in other countries leads it to a decrease in exports,other things equal,what would we expect to occur to prices?

• A)The world price of the commodity will tend to be lower than before the change.
• B)The domestic price of the commodity will rise.
• C)The domestic price of the commodity will tend to be higher, but the world price will not change.
• D)The domestic price of the commodity will be higher than the price in foreign countries, if transportation costs are positive.

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