The United States Can Produce Wine Domestically, but It Can

question 123

Essay

The United States can produce wine domestically, but it can also import wine on the world market if the world price of wine is lower than the domestic price of wine.Which of the following correctly describes the impact of imported wine on total surplus in the U.S.wine market?
A.Consumer surplus will increase by less than producer surplus will decrease; total surplus will decrease.
B.Consumer surplus will increase by the same amount as producer surplus will decrease; total surplus will stay constant.
C.Consumer surplus will decrease by less than producer surplus will increase; total surplus will increase.
D.Consumer surplus will increase by more than producer surplus will decrease; total surplus will increase.

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