Imports or Exports

In general people always think exports more are better than imports more. Actually the situation is different if you think from the different ways.

If you considered from the consumers’ profit, then imports more is better than exports. When the country import something it means the world price is lower than the domestic price. Once the country imports the goods it will bring down the domestic price below the original price which increases the consumers’ surplus. However, this will decrease domestic producers’ surplus because the domestic producers have to drop the price to match the world price.

If you think form the producers’ point of view, exports is better than imports. When you exports it means this country is at the advantage of producing this goods, also means the world price is higher than the domestic price. Once starts exporting goods it will bring the domestic price up to match the world price, the domestic producers will get more thus increase the domestic producers’ surplus. Domestic consumers are harmed because the price is increased thus they have to pay more to get the same goods.

However, no matter imports or exports the country as whole is benefited.

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