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A-Level Economics · World price above equilibrium (exports) diagram question

The world price PW sits ABOVE this country's equilibrium price. Which distance shows EXPORTS?

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The diagram

The answer

The distance A B. At PW domestic firms supply Q₃ (8) but domestic buyers only take Q₂ (2). The excess supply of 6 is sold abroad: exports = A to B. Run it in order: the world price is ABOVE the autarky price → domestic supply EXTENDS along Sd to Q₃ (point B) and domestic demand CONTRACTS along Dd to Q₂ (point A) → that gap is excess supply → the excess is exported. Exports = the horizontal gap A to B at the world price.

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