Scenario 9-1
The before-trade domestic price of peaches in the United States is $40 per bushel.The world price of peaches is $52 per bushel.The U.S.is a price-taker in the market for peaches.
-Refer to Scenario 9-1.If trade in peaches is allowed,U.S.producers of peaches
A)will be better off.
B)will be worse off.
C)will be unaffected.
D)will experience a decrease in their collective producer surplus.

Question

Quizplus · Accepted Answer

U.S. producers will be better off because they can sell their peaches at the higher world price of $52 per bushel, increasing their revenue and producer surplus.

Scenario 9-1 The Before-Trade Domestic Price of Peaches in the United States