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Homework answers / question archive / Consider a country that initially consumes 100 pairs of shoes per hour, all of which are imported

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

Economics

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.

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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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