Question

Domestic Market for Steel, Alpha
Qs P Qd
60 5 10
40 4 20
30 3 30
20 2 40
10 1 50

Domestic Market for Steel, Beta
Qs P Qd
80 5 20
70 4 30
60 3 40
50 2 50
40 1 60

The accompanying tables show data for the hypothetical nations of Alpha and Beta. Qs is the domestic quantity supplied, and Qd is the domestic quantity demanded. Assuming that Alpha and Beta are the only two nations in the world, the equilibrium world price must be higher than $1 because at $1:

A. Beta wants to import more than Alpha.
B. Alpha wants to export more than Beta.
C. Both nations want to export steel.
D. Both nations want to import steel.

Answer 1

Answer:

C) Both nations want to export steel.

Explanation:

Equilibrium price is the economic market situation where the quantity demanded of a commodity and the quantity supplied are equal. Both nations, alpha and beta would want to supply or export more steel because at the price of $1 both nations supplied less than the quantity which was demanded. More imports will be probably needed here which iwill push up their supply.