Question

Calculate the following if this country buys rice from other countries at the world price of $5 4. Quantity produced domestically

Answer 1

If the country buys rice form another country at a price of $5 then its local market will be affected.

Step-by-step explanation:

The countries import goods from other countries which are scarce in their local market. If the rice is imported from other country then its local rice market will be ruined. The local rice producers will be demotivated as their sales will decline. The local rice producers will have impact on their production and the prices of imported rice will be high.