Refer to the 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:

1) v and vz.
2) w and wy.
3) w and wz.
4) vx and xz.

 

1)

v and vz.