Suppose a country begins to allow international trade in steel.Which of the following outcomes will be observed regardless of whether the country finds itself importing steel or exporting steel?

Question

Quizplus · Accepted Answer

Allowing international trade in steel will increase the total supply of steel in the domestic market, leading to a decrease in the price of steel. As a result, the consumers of steel will benefit from lower prices, and the producers of steel will benefit from an increased quantity sold (even if at a lower price). This increase in consumer and producer surplus will always occur regardless of whether the country is importing or exporting steel. B and C may or may not occur depending on the specifics of the situation, and D is not necessarily true.

Suppose a Country Begins to Allow International Trade in Steel