Assume the small-country model is applicable. If the world price of the product is $6 and an import quota of 400 units is imposed on the product, then the equilibrium price in Marketopia would be ____ and the total quantity available in Marketopia would be ________ units.

Answer :

batolisis

Answer:

Equilibrium price = $6

Total quantity in the market would be > 400 units ( unchanged )

Explanation:

Applying small=country model

world price of product = $6

import quota = 400 units

The Equilibrium price in Marketopia would be $6 and the total quantity available in Marketopia would > 400 units

This is because in a small country assumption model, the total imports made by any country is insignificant to the Total quantity of the products available in the market therefore it has no effect on the price of the products even if when the imports are stopped by the country  

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