Q 22
22. China is a big manufacture of telephone instruments. Due to the member of WTO, it can sell its product in other member countries like India.
a) How will it affect the price and quantity sold of telephone instruments in India ?
b) Suppose that the demand for telephone instruments in relatively elastic. How will it affect India's total expenditure on telephone instruments ?
Dear student,
The supply of telephone instruments would rise as a result the price would fall.
As the demand is relatively elastic a fall in the price would mean a rise in the total expenditure.
The supply of telephone instruments would rise as a result the price would fall.
As the demand is relatively elastic a fall in the price would mean a rise in the total expenditure.