Refer to the given diagram, where S d and D d are the domestic supply and demand for a product and P c is the world price of that product. If this economy was entirely closed to international trade, equilibrium price and quantity would be:

image

A.  P a and z.
B.  P a and x.
C.  P c and z.
D.  P c and v.

ANSWER:

B.  P a and x.