Under what circumstances would the United States which is a
Under what circumstances would the United States, which is a manufacturer of blue cheese and ordinary, processed cheese, import blue cheese from France?
| It can be cheaper than the US product, yielding consumer surplus in the United States. |
Solution
We know the fact that the United States is a manufacturer of blue cheese as well as the ordinary, processed cheese as well. The United States will import the blue cheese from France, only and only if France is efficient in making blue cheese and the cost of imported blue cheese is lesser than the cost of self-producing the blue cheese.
Thus, in other terms, it can be cheaper than the US blue cheese product, yielding consumer surplus in the US.
