Refer to the diagram showing the domestic demand and supply curves for a specific standardized product in a particular nation. If the world price for this product is $.50, this nation will experience a domestic:





A.  shortage of 160 units, which it will meet with 160 units of imports.

B.  shortage of 160 units, which will increase the domestic price to $1.60.

C.  surplus of 160 units, which it will export.

D.  surplus of 160 units, which will reduce the world price to $1.00.

A.  shortage of 160 units, which it will meet with 160 units of imports.

Economics

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