The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4

-Creating conditions for fair trade by limiting imports will make the domestic consumers better off as they will be required to pay low prices for the products.

Question

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4
 
-Creating conditions for fair trade by limiting imports will make the domestic consumers better off as they will be required to pay low prices for the products.

Quizplus · Accepted Answer

Limiting imports will reduce the availability of cocoa in the domestic market, which will shift the supply curve to the left, leading to an increase in price for domestic consumers. Therefore, they will not be better off, and fair trade may not be beneficial in this case.

The Figure Below Shows the Demand (D) and Supply (S)