The world price of a pair of shoes is $20. Explain how consumer surplus and producer surplus

Question:

The world price of a pair of shoes is $20. Explain how consumer surplus and producer surplus in Brazil change as a result of international trade. Show the change in Brazil’s consumer surplus (label it C) and the change in Brazil’s producer surplus (label it D).

FIGURE 1 U.S. SHOE MARKET Price (dollars per pair) 40 30 20 10 FIGURE 2 BRAZIL'S SHOE MARKET Price (dollars