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Closed domestic market in equilibrium at point

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If we start with a closed domestic market in equilibrium at point A (i.e., the starting price is P2 and the output is Q2), what happens if the domestic market is opened up for foreign competition?

a. Consumers will be able to purchase Q3 unites at the price of P1

b. Imports will increase by Q3-Q1

c. Domestic workers in this industry will discourage such a change in policy

d. Domestic firms revenues will fall from OP2aQ2 to OP1bQ1

e. All of the above will happen

Reference no: EM132288638

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