Suppose Russia Produces Caviar and Sells It for $15 a Can

question 228

Multiple Choice

Suppose Russia produces caviar and sells it 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 up all the U.S.-made 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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