Final answer:
Official prices ensure that imported goods will not be sold at minimum prices to avoid dumping. They also discourage the existence of a black market for imported goods and make it difficult for companies to use low-priced invoices to avoid tariffs. However, official prices do not guarantee that corruption will be minimal.
Step-by-step explanation:
Official prices ensure that imported goods will not be sold at minimum prices to avoid dumping. This means that option A is incorrect. Official prices also discourage the existence of a black market for imported goods because the government sets the prices. Therefore, option B is also incorrect. Additionally, official prices make it difficult for companies to use low-priced invoices to avoid tariffs, so option C is incorrect. Finally, while official prices aim to minimize corruption, it does not guarantee that corruption will be minimal. So option D is also incorrect.
Official pricing policies like high tariffs and anti-dumping laws are intended to protect domestic industries from foreign competition, but can result in the creation of black markets, increased corruption, and economic inefficiency, with little evidence supporting the benefit of these policies over free market competition.
The question relates to the effects of official pricing policies on imported goods and the potential for secondary market consequences. The implementation of high tariffs and anti-dumping laws intends to protect domestic industries from foreign competition by setting minimum prices on imports to prevent dumping—selling goods in a foreign market at a price below their cost. This helps to avoid domestic firms having to compete at unsustainable prices, potentially protecting them from overseas entities taking over the market.
However, such policies can lead to unintended outcomes, such as the creation of black markets where goods are sold without regard to official restrictions, and an increase in corruption as companies may resort to bribing government officials for permits to import necessary goods. Instead of promoting competition and industry success, these policies may lead to higher prices, reduced competition, and lower quality of goods, contrary to the anticipated job and industry growth.
Import substitution strategies aiming to reduce dependency on foreign goods could, paradoxically, harm the overall economic environment by impeding competition, which in theory, should regulate the market and offer better prices to consumers. Contrary to anti-dumping laws' intent, there is little evidence that supports the assumption of foreign firms engaging in predatory pricing practices once they establish market dominance.