Final answer:
The equilibrium price and quantity in each country without international trade are determined by the intersection of domestic supply and demand curves. When trade is introduced, these equilibriums shift based on comparative advantage and world prices, which can be visualized using supply and demand diagrams that also reflect export and import volumes post-trade.
Step-by-step explanation:
The question pertains to determining the equilibrium price and quantity in a closed economy as well as in an open economy where trade is allowed. In a closed economy, the equilibrium price and quantity are determined where the market supply and demand curves intersect. Without trade, each country's market dynamics depend solely on their internal supply and demand, which sets the domestic price and quantity.
If trade is allowed, the equilibrium in each country could shift depending on comparative advantages, production costs, and consumer preferences. This would create new points of equilibrium reflecting a balance between imported and exported goods, thus impacting the domestic price levels and quantities sold. Identifying these new equilibriums involves examination of both countries' supply and demand curves in comparison to world prices.
Supply and demand diagrams can visually represent these scenarios. Before trade, diagrams reflect internal equilibriums only, while after trade, they might indicate volumes of exports and imports as deviations from the initial equilibrium, prompted by the trade price influencing domestic markets.