Figure 9-18

question 59

Multiple Choice

Figure 9-18.On the diagram below,Q represents the quantity of peaches and P represents the price of peaches.The domestic country is Isoland.
-Refer to Figure 9-18.Suppose Isoland changes from a no-trade policy to a policy that allows international trade.If the world price of peaches is $5,then the policy change results in a

• A)$25 decrease in consumer surplus.
• B)$20 increase in consumer surplus.
• C)$25 decrease in producer surplus.
• D)$20 increase in producer surplus.

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Definitions:

Fixed Costs

Costs that do not fluctuate with the volume of production or sales, such as rent, salaries, or insurance premiums.

Janitorial Costs

Expenses associated with cleaning and maintaining a company's premises, including wages for janitorial staff and cleaning supplies.

Fixed Cost

A cost that does not change with an increase or decrease in the amount of goods or services produced or sold.

Unit Variable Cost

The cost associated with producing one additional unit of a product, including materials, labor, and other variable expenses.