Figure 7.1

Figure 7.1 shows Canadian demand and supply for leather footwear.
-Refer to Figure 7.1.Suppose the government allows imports of leather footwear into Canada.The market price falls to $18.What are the values of consumer surplus and domestic producer surplus?

Question

Figure 7.1
  
Figure 7.1 shows Canadian demand and supply for leather footwear.
-Refer to Figure 7.1.Suppose the government allows imports of leather footwear into Canada.The market price falls to $18.What are the values of consumer surplus and domestic producer surplus?

Quizplus · Accepted Answer

When the market price falls to $18 due to imports, consumer surplus increases as consumers pay less, and producer surplus decreases as domestic producers receive less. The given values reflect this change.

Figure 7.1 Figure 7.1 Shows Canadian Demand and Supply for Leather Footwear