When a country allows trade and becomes an importer of a good,what happens to consumer surplus and producer surplus
A)Consumer surplus and producer surplus will increase.
B)Consumer surplus and producer surplus will decrease.
C)Consumer surplus will increase, and producer surplus will decrease.
D)Consumer surplus will decrease, and producer surplus will increase.

Question

Quizplus · Accepted Answer

When a country becomes an importer of a good, it means the domestic producers are no longer the only ones supplying the good, which leads to more competition and ultimately lower prices for consumers. This increase in consumer surplus may lead to a decrease in producer surplus, as domestic producers may have to lower their prices in order to remain competitive. Therefore, consumer surplus will increase, and producer surplus will decrease.

When a Country Allows Trade and Becomes an Importer of a Good,what