Question

Is there any disadvantage to a government subsidizing domestic firms to make them able to compete in price with cheaper imported goods? No, it helps domestic consumers, firms, and workers. No, the only ones who suffer are the foreign firms. Yes, consumers must pay higher prices. Yes, consumers must pay higher taxes.

Answer 1

PLATO ANSWER: Yes, increase taxes...

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Answer 2

The disadvantage to government subsidies of domestic firms to make them able to compete in price with cheaper imported goods can impact the levels of taxes that consumers must pay. Overall it will not impact prices because the domestic producers will still have to compete with cheaper imports.