Multiple Choice
The diagram below illustrates the international tin market. Assume that producing and consuming countries establish an international commodity agreement under which the target price of tin is $5 per pound.
Figure 7.1. Defending the Target Price in Face of Changing Demand Conditions
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-Consider Figure 7.1.Suppose the demand for tin decreases from D0 to D2.Under a system of export quotas, the tin producers could maintain the target price by
A) increasing the quantity of tin supplied by 15 pounds.
B) increasing the quantity of tin supplied by 30 pounds.
C) decreasing the quantity of tin supplied by 15 pounds.
D) decreasing the quantity of tin supplied by 30 pounds.
Correct Answer:
Verified
Correct Answer:
Verified
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