The following graph represents Canada's domestic supply and demand for coffee. Assume that Brazil is the only country producing and selling coffee in the world market. B) The government opens the market to free trade, and Brazil enters the market, pricing coffee at $1 per pound. i. What will happen to the domestic price of coffee? ii. What will be the new domestic quantity supplied and domestic quantity demanded? iii. How much coffee will be imported from Brazil?

ENGR.ECONOMIC ANALYSIS
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The following graph represents Canada's domestic supply and demand for coffee.
Assume that Brazil is the only country producing and selling coffee in the world market.

B) The government opens the market to free trade, and Brazil enters the market, pricing
coffee at $1 per pound.

i. What will happen to the domestic price of coffee?
ii. What will be the new domestic quantity supplied and domestic quantity demanded?
iii. How much coffee will be imported from Brazil?
Price per pound
$3.00
1.75
1.50
1.00
0
50
100 125 150
S
D
200
300
Millions of pounds
Transcribed Image Text:Price per pound $3.00 1.75 1.50 1.00 0 50 100 125 150 S D 200 300 Millions of pounds
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