Consider a country that initially consumes 100 pairs of shoes per hour, all of which are imported

Economics Dec 10, 2020

Consider a country that initially consumes 100 pairs of shoes per hour, all of which are imported. The price of shoes is $40 per pair before a ban on importing them is imposed. Use a graph to explain what happens to the price of shoes and the number of shoes consumed after a total ban on imports.

Expert Solution

As the ban is imposed on imports then the supply curve shifts leftward with the same demand curve such that the price level increases and quantity decreases.

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