Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product. With free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers respectively would be:

a. w and wy.
b.  v and vz.
c. w and wz.
d. vx and xz

ANSWER:

b.  v and vz.