Consider a market in a small country with a domestic demand curve of P = 10 - q and a domestic supply curve of P = q.The world price for the good is $8 per unit.If the government opens the market up to international trade:
A) Consumer surplus increases by $10 and producer surplus increases by $20.
B) Consumer surplus falls by $8 and producer surplus increases by $9.
C) Consumer surplus falls by $10.5 and producer surplus increases by $19.5.
D) Consumer surplus falls by $9 and producer surplus increases by $9.
E) Consumer surplus falls by $5 and producer surplus increases by $10.
Correct Answer:
Verified
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Q10: Which statement is true?
A)In a small country,
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