>> International Economics
Now, suppose that Maine lobsters can also be sold in France. The French demand schedule for Maine lobsters is as follows:
Price of lobster Quantity of lobster demanded
(per pound) (pounds)
$ 25 100
$ 20 300
$ 15 500
$ 10 700
$ 5 900
a. What is the demand schedule for Maine lobsters now that French consumers can also buy them?
b. The equilibluim of the French cost per pound would be $20 per pound and the pounds of lobster would be 700 This gives a good opportunity to sell to the fishermans and they would be better off. If they would sell more lobster at a higher price the United States would be worse off. They must pay a higher price for lobster and, as a result, consume less lobster.($20 versus $15 per pounds,400 versus 600 pounds)
c. Using the combined Us and French demand schedule, the US demand schedule and the supply schedule, and the graph below, analyze the change in the market for lobsters. (hint: use the 10 question Worksheet approach) Explain your analysis and answer these two questions.
What will happen to the price at which fishermen can sell lobster?
What will be the final output of lobsters?
d. What will happen to the price paid by U.S. consumers? What will happen to the quantity consumed by U.S. consumers?