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Q. Suppose that a small nation produces mushrooms for domestic consumption also possible export. The national demand also supply curves for mushrooms in this nation are given by:
P= 60 - M (demand)P= 20 + M (supply)
where P denotes the relative price of mushrooms also M denotes the quantity of mushrooms (in tons).
a. Illustrate these relationships graphically.
b. Illustrate what are the autarky price also quantity exchanged?
c. Suppose that the world price of mushrooms is 45. Will this small nation export mushrooms? If so, elucidate how many tons?
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