Question

suppose etherland is an active participant in the world market for console video games. the graph above shows etherlands domestic market for video games. further suppose that th 1. etherland doesnt have producing video games 2 and is an importer market. 3. etherland imports/exports select units of video games.

Explanation:

Step1: Analyze domestic equilibrium

At domestic equilibrium (where Domestic S = Domestic D), the price is $50 and quantity is 70.

Step2: Compare with world - price

The world - price is $75. At $75, domestic quantity demanded is 40 (from the demand curve) and domestic quantity supplied is 100 (from the supply curve).

Step3: Determine import/export status

Since quantity supplied (100) > quantity demanded (40) at the world - price of $75, Etherland has a surplus and will export. The amount of exports is 100 - 40=60 units.

Answer:

1. doesn't have
2. exporter
3. 60