Question

You are a citizen of the country of Tahpshef, which produces many domestic kitchen appliances. Recently, Tahpshef's government lifted many trade barriers, and the domestic kitchen appliance industry is now experiencing free trade as imports enter the market. This increase in competition from foreign companies can lead to what?

a. consumers paying lower domestic prices for kitchen appliances.
b. improved technology and innovation in the kitchen appliance industry.
c. more variety in kitchen appliance products for domestic consumers.
d. the quality of kitchen appliances available to consumers declining dramatically.
e. less innovation because of higher costs from competition

Answer 1

A,B,C

Step-by-step explanation:

As a result of the free trade which allows import, the supply of kitchen appliance increases. When supply increases, the price price of kitchen appliances falls.

As a result of the free trade, diffusion of knowledge also occurs and this increases the level of innovation in the kitchen appliance industry.

Before the free trade was enacted, citizens of the country of Tahpshef could only purchase locally made kitchen appliances but after the free trade was enacted, the options of the members of this country would increase and they can also purchase imported goods.