This Graph Demonstrates the Domestic Demand and Supply for a Good,as

question 94

Multiple Choice

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good.
According the graph shown,if this economy were open to free trade,it would:

• A)import this good,because the domestic price is greater than the world price.
• B)export this good,because the domestic price is greater than the world price.
• C)import this good,because the world price is greater than the domestic price.
• D)export this good,because the world price is greater than the domestic price.

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Definitions:

Total Fixed Costs

The sum of all costs that remain constant regardless of the level of production or sales volume, encompassing items such as rent, salaries, and insurance premiums.

Variable Cost

Costs that change in proportion to the level of activity or volume of production.

Break-Even Point

The level of production or sales at which total costs equal total revenue, resulting in no net profit or loss.

Fixed Costs

Costs that remain constant in total regardless of changes in the level of production or sales volume.