A country opens up to trade and becomes an importer of some good.Consumer surplus on that good ________,and producer surplus on that good ________.

Question

Quizplus · Accepted Answer

When a country opens up to trade and becomes an importer of a good, consumer surplus increases because consumers now have access to the good at a lower price than before. Producer surplus decreases because domestic producers face competition from cheaper imports, reducing their market share and the price they can charge.

A Country Opens Up to Trade and Becomes an Importer