When a country allows trade and becomes an importer of a good,
A)both domestic producers and domestic consumers become better off.
B)domestic producers become better off,and domestic consumers become worse off.
C)domestic producers become worse off,and domestic consumers become better off.
D)both domestic producers and domestic consumers become worse off.

Question

Quizplus · Accepted Answer

When a country allows trade and becomes an importer of a good, domestic producers face more competition from foreign producers and may see a decrease in their market share and profits. However, domestic consumers benefit from the availability of the imported good and may see lower prices, leading to an increase in their overall welfare. Therefore, domestic producers become worse off, and domestic consumers become better off.

When a Country Allows Trade and Becomes an Importer of a Good