Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply (s) for cameras in Thailand and Japan is described by the following functions:
P is the price measured in a common currency used in both countries, such as the Thai Baht.
- Compute the equilibrium price (P) and quantities (Q) in each country without trade.
- Now assume that free trade occurs. The free-trade price goes to 56.36 Baht. Who exports and imports cameras and in what quantities?