Canada's producer surplus ________ when Canada imports a good,and Canada's producer surplus ________ when Canada exports a good.

Question

Quizplus · Accepted Answer

When Canada imports a good, the domestic producers lose out on potential sales and profits, thus decreasing their producer surplus. On the other hand, when Canada exports a good, the domestic producers benefit from the higher prices they can receive in foreign markets, thus increasing their producer surplus. Therefore, the correct answer is C, as it reflects the opposite effects on producer surplus for importing and exporting goods.

Canada's Producer Surplus ________ When Canada Imports a Good,and Canada's