Compared to the no-trade situation, when a country imports a good,
A) domestic consumers gain, domestic producers lose, and the gains outweigh the losses.
B) domestic consumers lose, domestic producers gain, and the gains outweigh the losses.
C) domestic consumers gain, domestic producers lose, and the losses outweigh the gains.
D) domestic consumers gain, but domestic producers lose an equal amount.

Question

Quizplus · Accepted Answer

When a country imports a good, domestic consumers benefit from lower prices and increased variety, while domestic producers face increased competition and may lose market share. However, the overall gains to consumers typically outweigh the losses to producers, leading to a net gain in welfare.

Compared to the No-Trade Situation, When a Country Imports a Good