Posted: January 14th, 2017

Suppose that Maine lobsters can be sold only in the United States.

Suppose that Maine lobsters can be sold only in the United States. The U.S. demand schedule for Maine lobsters is as follows:
a. Draw the demand curve and the supply curve for Maine lobsters. What is the equilibrium price and quantity of lobsters?
Now suppose that Maine lobsters can be sold in France.The French demand schedule for Maine lobsters is as follow:
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 fishermen can sell lobster? What will happen to the price paid by U.S. consumers? What will happen to the quantity consumed by U.S. consumers?