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(Solved): The following graph shows the domestic demand for and supply of limes in Bangladesh. The world price ...



The following graph shows the domestic demand for and supply of limes in Bangladesh. The world price (PW ) of limes is $770 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of limes and that there are no transportation or transaction costs associated with international trade in limes. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place.



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