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 total social 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 total social surplus will ________ by ________.

Quizplus · Accepted Answer

When a foreign country engages in dumping by selling at a price lower than the world price (P1 < PW), the domestic country's total social surplus increases. This is because consumers benefit from lower prices, which increases consumer surplus by the area bcd. Producer surplus decreases, but the increase in consumer surplus (bcd) outweighs the loss to producers, leading to an overall increase in total social surplus.

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