Exports
When the world price is above equilibrium, the country will export the product, which is when we sell our products to other countries.
- In the diagram above, at the world price of $12, the domestic supply is ________ units and the domestic demand is only ________ units so this country can export the difference between supply and demand to other countries.
- The exports are equal to the excess ________.
- In the diagram above the exports = ________
- WIthout trade, the price is ________ so the consumer surplus is the triangle above that (A + B)
- With trade, the price is ________ and domestic consumers are buying a quantity of ________ so consumer surplus is the triangle above that price and quantity (A).
- Without trade, the price is ________ so the producer surplus is the triangle below that (C).
- With trade, the price is ________ and domestic producers are selling a total quantity of ________ so producer surplus is the triangle below that price and quantity (B + C + D). We can summarize all this below:
Before Trade After Trade Change
Consumer Surplus ________ ________ ________
Producer Surplus ________ ________ ________
Total Surplus ________ ________ ________