If Belgium Exports Chocolate to the Rest of the World

question 15

True/False

If Belgium exports chocolate to the rest of the world, then Belgian chocolate producers benefit from higher producer surplus, Belgian chocolate consumers are worse off because of lower consumer surplus, and total surplus in Belgium increases because of the exports of chocolate.

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Definitions:

Marginal Cost

The expenditure required to produce one more unit of a particular product or service.

Monopolistically Competitive

A market structure characterized by many firms, differentiated products, and free entry and exit, allowing firms some control over price while still competing on quality, branding, and price.

Externality

A cost or benefit that affects a third party who did not choose to incur that cost or benefit.

Efficient Scale

The level of production at which a firm's average total costs are minimized.