The Following Figure Shows the Demand Curve, D, and Supply

Multiple Choice

The following figure shows the demand curve, D, and supply curve, S, of ballpoint pens in Lithasia. The world price of pens is $2.

-Refer to the figure above.Which of the following methods is the best way to compensate the losers from opening Lithasia to international trade?

A) The sellers in Lithasia could be taxed and the revenue could be used to compensate buyers.
B) The buyers in Lithasia could be taxed and the revenue could be used to compensate sellers.
C) Both buyers and sellers could be taxed and the revenue could be retained by the government.
D) The sellers in Lithasia could sell the pens at a price above the equilibrium price in the domestic market.