Given That the Import Price of a Commodity Is Lower

question 29

Multiple Choice

Given that the import price of a commodity is lower than the equilibrium domestic price, international trade:

• A) would not be beneficial to the society.
• B) would not be beneficial to the consumers.
• C) would be beneficial to the domestic producers.
• D) would be beneficial to the society.

---

Definitions:

Merchandise Inventory

Goods or products that a retailer, wholesaler, or distributor holds for the purpose of selling to customers.

Gain on Realization

Profit recognized from selling an asset for more than its book value.

Loss or Gain

The financial result from business transactions, investments or other financial events, indicating a profit (gain) or a deficit (loss).

Realization Account

An account used in the process of dissolving a partnership or corporation, where the assets are converted into cash and liabilities are paid off.