Chapter 3, Problem 6P

To determine

To Answer:

The following questions based on the given table.

Suppose that the supply schedule of Maine lobsters is as follows

Suppose the Maine lobsters can be sold only in the United State. The U.S demand schedule for Maine is as follows.

a). Draw the demand curve and the supply curve for Maine lobsters. What are the equilibrium price and quantity of lobsters?

Now suppose that Maine lobsters can be sold in France. The French demand for Maine lobsters is as follows.

b). What is the demand schedule for Maine lobsters now that French consumers can also buy them? Draw a supply and demand diagram that illustrates the new equilibrium price and quantity of lobsters. What will happen to the price at which fisherman can sell lobsters? What will happen to the price paid by U.S consumers? What will happen to the quantity consumed by the U.S consumers?

Concept Introduction:

Supply: The supply is the ability of the seller to produce the goods and services and sell it at the prevailing price.

Equilibrium price: The equilibrium price is at which the demand and supply are equal.

Demand curve: Demand curve is the graphical representation of the demand schedule.

Supply curve: Supply curve is the graphical representation of the supply schedule.