Figure 32-5 An Exported Good
The Pattern of Foreign Trade
Let us now see what determines the pattern of international trade in such
circumstances.
An Exported Product
To determine the pattern of Canadian trade, we first show the Canadian
domestic demand and supply curves for some product, say, lumber. This
is done in Figure 32-5. The intersection of these two curves tells us what
the price and quantity would be in Canada if there were no foreign trade
this situation, the price in Canada would be and the quantity of lumber
exchanged would be
pd
Qd.