Relative to a no-trade situation,what effect will importing a good from foreign nations have on the domestic market for the good?

Question

Quizplus · Accepted Answer

When a good is imported from foreign nations, the supply curve shifts to the right, which results in a surplus of the good and causes the equilibrium price to fall. This is because foreign producers can sell the good at a lower price due to differences in production costs, thereby decreasing the demand for domestically produced goods. As a result, total domestically produced output will also fall.

Relative to a No-Trade Situation,what Effect Will Importing a Good