Suppose China allows trade in steel and the world price of steel is lower than the domestic price of steel in China.

1. If we assume that China is a price taker in the steel market, will China import or export steels?
2. Using a diagram, show China's
3. consumer surplus before and after trade.
4. producer surplus before and after trade.
5. total surplus before and after trade
6. Determine who wins and losses in China as a result of the steel trade. Does China better off after trade? Briefly explain.