In a market that moves from a situation of no trade to a situation where a good is exported, the price of the good ________ and the quantity produced by the domestic industry ________.

Question

Quizplus · Accepted Answer

When a good is exported, the demand for the good increases in the foreign market, leading to an increase in price. This encourages domestic producers to increase production, thus increasing the quantity produced. Therefore, the price of the good rises and the quantity produced by the domestic industry increases.

In a Market That Moves from a Situation of No