Question

If the world price of a good exceeds the domestic price of the good, will the country export or import the good. In this scenario who gain from free trade: Domestic consumers or Domestic producers? Explain.

Answer 1

1. Export the good

2. Domesctic producers

Step-by-step explanation:

Export the good will be the logical thing to do as producers will gain for the higher price of the goodin foreign markets.