Answer the question(s)below based on the following diagram.

-Refer to the diagram above,which represents a country's supply and demand for an internationally traded good.If PW is the world price,and a foreign country engages in dumping by selling at P1,the country's producer surplus will ________ by ________.

Question

Answer the question(s)below based on the following diagram.
 
-Refer to the diagram above,which represents a country's supply and demand for an internationally traded good.If PW is the world price,and a foreign country engages in dumping by selling at P1,the country's producer surplus will ________ by ________.

Quizplus · Accepted Answer

Dumping by a foreign country selling at P1 will increase the quantity demanded in the domestic market, leading to a decrease in the domestic market price to P2. This causes the domestic producer surplus to decrease by a triangular area bounded by the original producer surplus (triangle A), the new producer surplus at P2 (triangle B), and the quantity increase (rectangle C).

Answer the Question(s)below Based on the Following Diagram