In a market that moves from a situation of no trade to a situation where a good is imported, in the importing country the price of the good ________, and producer surplus ________.

Question

Quizplus · Accepted Answer

When a good is imported, the supply in the importing country increases, shifting the supply curve to the right. This leads to a decrease in the domestic price of the good (as there is more supply available) and a decrease in producer surplus, as producers now receive a lower price for their goods. Therefore, option B is the correct choice.

In a Market That Moves from a Situation of No