The domestic market price of a certain product is 80.

The product is manufactured in Iceland and purchased by Icelandic consumers.

No cross-border trade is allowed with this product.

Trade freedom is now granted, but the world market price of the product is 70.

Which of the following happens:

The domestic market price of a certain product is 80.

The product is manufactured in Iceland and purchased by Icelandic consumers.

No cross-border trade is allowed with this product.

Trade freedom is now granted, but the world market price of the product is 70.

Which of the following happens:

-Total revenue remains the same because producer revenue decreases as much as consumer revenue increases

-The same amount is produced of the product in Iceland

-Production in Iceland is automatically suspended

-More is produced of the product in Iceland

-Total profit increases because consumer profit increases more than producer profit decreases.

-Producer profits increase

-There will be no trade as the world market price is lower than the domestic price