. When China’s clothing industry expands, the increasein world supply lowers the world price of clothing.a. Draw an appropriate diagram to analyze howthis change in price affects consumer surplus,producer surplus, and total surplus in a nationthat imports clothing, such as the United States.b. Now draw an appropriate diagram to show howthis change in price affects consumer surplus,producer surplus, and total surplus in a nationthat exports clothing, such as the DominicanRepublic.c. Compare your answers to parts (a) and (b). Whatare the similarities and what are the differences?Which country should be concerned about theexpansion of the Chinese textile industry? Whichcountry should be applauding it? Explain
. When China’s clothing industry expands, the increase
in world supply lowers the world price of clothing.
a. Draw an appropriate diagram to analyze how
this change in price affects
that imports clothing, such as the United States.
b. Now draw an appropriate diagram to show how
this change in price affects consumer surplus,
producer surplus, and total surplus in a nation
that exports clothing, such as the Dominican
Republic.
c. Compare your answers to parts (a) and (b). What
are the similarities and what are the differences?
Which country should be concerned about the
expansion of the Chinese textile industry? Which
country should be applauding it? Explain
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