Use the following to answer question:
-(Figure: The Market for Roses) Use Figure: The Market for Roses.Assume that P_A is the autarky price and P_W is the world price.Consumer surplus with international trade would be area:

Question

Use the following to answer question:

-(Figure: The Market for Roses) Use Figure: The Market for Roses.Assume that P_A is the autarky price and P_W is the world price.Consumer surplus with international trade would be area:

Quizplus · Accepted Answer

With international trade, the price of roses decreases to P_W which means consumer surplus increases by the areas of W, X, and Z. Therefore, the total consumer surplus with international trade would be W + X + Z.

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