An economy with long history of extensive trade barriers, decides to switch to totally free trade. What…
Consumers’ surplus is most likely to increase as trade barriers are removed. Access to lower-priced imports and a wider range of goods benefits consumers, while tariff…
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An economy with long history of extensive trade barriers, decides to switch to totally free trade. What is most likely to increase in the short-run ?
Answer and explanation
Correct answer C
Consumers’ surplus is most likely to increase as trade barriers are removed. Access to lower-priced imports and a wider range of goods benefits consumers, while tariff revenue falls and import-competing producers can face reduced profits.
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Maharashtra and Goa SET (MH SET)