If Peru exports coffee to the rest of the world, Peruvian consumers of coffee are worse off as a result of trade, but Peruvian producers of coffee are better off.

Question

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When a country exports a good, the domestic price of that good increases. This means that Peruvian consumers of coffee will pay a higher price for their coffee than they would have without trade. However, Peruvian producers of coffee will benefit from the higher prices they receive in the global market. Therefore, while Peruvian coffee consumers are worse off, Peruvian coffee producers are better off as a result of trade.

If Peru Exports Coffee to the Rest of the World