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Scenario 9-2
• For a small country called Boxland,the equation of the domestic demand curve for
cardboard is ,
where represents the domestic quantity of cardboard demanded,in tons,and
represents the price of a ton of cardboard.
• For Boxland,the equation of the domestic supply curve for cardboard is ,
where represents the domestic quantity of cardboard supplied,in tons,and
again
represents the price of a ton of cardboard.
-Refer to Scenario 9-2.Suppose the world price of cardboard is $60.Then,relative to the no-trade situation,international trade in cardboard produces which of the following results for Boxland?
Profit-maximizing Level
The output level at which a firm achieves the highest possible profit.
Short-run
In economics, a period wherein at least one input (like capital) is fixed, and firms can only adjust variable inputs (like labor).
Normal Profits
The level of profit necessary to keep a firm in a specific industry or market in the long run, equating to the firm’s opportunity costs.
Profit-maximizing
A business strategy or operational mode where the primary goal is to achieve the maximum possible profits.
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