Domestic supply and demand equations

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The US market of rice is described by the following domestic supply and demand equations: QdUS = 200 – 2 P , QsUS = -100 + 3 P where QdUS and QsUS represent the quantities demanded and supplied (in millions of tons) and P is the price per ton of rice (in hundreds of $). c) But the US not only produces but also imports rice. Now assume that foreigners are allowed to sell rice in the US. Assume that the foreign supply equation is QsF = - 200 + 5 P What would be the new equilibrium price of rice in the US when rice imports are allowed? (Hint: what is now the market (total) supply equation of rice?) Draw in only ONE graph the equilibrium situation before and after rice imports.

Reference no: EM131253100

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