An effective Buy American law would tend to increase U.S.producer surplus at the expense of U.S.consumer surplus.

Question

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If a Buy American law is implemented, it would require that goods be purchased from domestic sources, thereby increasing demand for U.S. wine. This would shift the demand curve towards the right, increasing the equilibrium price and quantity supplied. As a result, producers would benefit from an increase in producer surplus, but consumers would pay a higher price and experience a decrease in consumer surplus. Therefore, an effective Buy American law would tend to increase U.S. producer surplus at the expense of U.S. consumer surplus.

An Effective Buy American Law Would Tend to Increase U