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Unformatted text preview: At p = 50, China does not want to import or export any helmets. At 50 < p < 150, there is an equilibrium quantity at which China wants to export and U.S. wants to import. Trade creates winners and losers. In the above example, winners are American consumers and Chinese producers while the losers are Chinese consumers and American producers. Can we quantify the gains and losses? Why are helmets expensive in the U.S. and cheap in China (in absence of trade)? To be shown:-The gains and losses of trade can be quantified in dollars and cents-Benefits outweigh the costs for each country...
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