When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,
A)producer surplus increases and total surplus increases in the market for that good.
B)producer surplus increases and total surplus decreases in the market for that good.
C)producer surplus decreases and total surplus increases in the market for that good.
D)producer surplus decreases and total surplus decreases in the market for that good.

Question

Quizplus · Accepted Answer

When a country stops importing a good, domestic producers benefit from reduced competition, increasing producer surplus. However, consumers face higher prices and less variety, leading to a decrease in total surplus.

When a Country That Imported a Particular Good Abandons a Free-Trade