eStudy.us copyright © 2010, All rights reserved The gains and losses of an importing country If domestic equilibrium price before trade is above world price Once trade is allowed Domestic price lowers to world price Domestic quantity supplied < domestic quantity demanded The difference is imports Domestic Winner: Consumers, purchase more product at the lower world price Domestic Loser: Producers, sell less product and the lower world price Net Gains from trade: winners exceed value that of losers International trade in an exporting country
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