It is widely recognized that trade restrictions on imported products result in higher domestic prices for the goods involved. Despite this, it is argued that the lower cost of imported apparel items is not passed on in the form of lower consumer prices [Library o f Congress Study on Imports and Consumer Prices, Government Printing Office, 1977]. Although the apparel industry is quite competitive it is said that "[t] o the extent that the retail 'mark-up' on foreign goods is greater than 'mark-up' on competing domestic goods, retailers gain the benefit of the lower priced foreign goods [Council on Wage and Price Stability, Textiles/AppareL Government Printing Office, 1978, pp. 53-74] ." This assertion is based on three general observations. The first is that the imported products cost less than equivalent domestic products. This is clearly true for many categories of apparel imports. Secondly, it is said that the imported items sell for approximately the same price as equivalent domestic substitutes on the U.S. market. No economist would argue that identical goods will sell for different prices in the same market. Finally, the implication is that there is a higher markup and profit on imported items. Again, it is quite likely that this is true for many apparel items. The combination of these factors is taken to imply that there is no price benefit to the U.S. consumer from lower-cost apparel imports. Clearly, if there were free trade in apparel goods, there would be no question of a differential markup or excess profits. Each firm would produce until marginal cost equalled the world price of the particular item. It is where trade restrictions exist that foreign manufacturers of apparel have lower marginal costs of production, and domestic retailers earn excess profits. The lower cost, identical price, and extra profits on imported apparel items do not establish that there is no gain to consumers from these imports. Suppose we accept the argument that the foreign marginal cost curve lies below the domestic marginal cost curve for the apparel goods. A quota on imported goods will restrict their importation below the free trade level. But the total supply schedule facing the United States is a horizontal summation of the domestic supply schedule and the quota-restricted imports. Thus the U.S. supply curve exceeds that with no trade. With a competitive market, the consumer does pay a lower price than if no trade were permitted. The argument that retailers simply mark up lower cost imported goods to the already established domestic price, ignores the most fundamental concepts of price determination in competitive markets.