Relative to the domestic market without trade,when the country is able to import from abroad at a price less than the domestic price,which of the following will NOT occur?

Question

Quizplus · Accepted Answer

When a country is able to import at a lower price than the domestic price, the consumer surplus will increase as consumers can buy the same product at a lower price. The producer surplus will decrease as domestic producers will receive a lower price for their product. However, the overall welfare of the country will increase as importing the product at a lower cost provides more options for consumers and can lower the cost of production for businesses, ultimately leading to an increase in CS + PS. Therefore, the country will not be worse off, and option A is incorrect.

Relative to the Domestic Market Without Trade,when the Country Is