Final answer:
The present equilibrium price for Thousand Board Feet is $600, and the domestic production at this price is 800 Thousand Board Feet. This is where the quantity demanded equals the quantity supplied, resulting in market stability without surplus or shortage.
Step-by-step explanation:
The question at hand involves determining the equilibrium price and domestic production for Thousand Board Feet, given various price levels and corresponding quantities demanded and supplied domestically. The equilibrium point is the price at which the quantity of the product demanded by consumers equals the quantity supplied by producers. According to the data provided, we need to identify the point at which the quantity demanded equals quantity supplied.
By examining the table, we can see that at a price of $600, the quantity demanded domestically (800) exactly equals the quantity supplied domestically (800). Therefore, the equilibrium price is $600, and the domestic production at this price is 800 Thousand Board Feet. This point is where the market for this product reaches stability and there is neither excess supply (surplus) nor excess demand.
An analogy can be drawn from the information provided about gasoline prices. Just as a higher price of $1.80 for gasoline resulted in a surplus due to quantity supplied exceeding quantity demanded, any price above the equilibrium price for Thousand Board Feet would also result in a surplus. The equilibrium price is critical because it is where the market naturally gravitates towards balance without any surplus or shortage.