Final answer:
The 'defend' strategy in business refers to protecting domestic industries through protectionism. This is achieved using methods like tariffs, import quotas, and subsidies, which alter the dynamics of supply, demand, and market equilibrium.
Step-by-step explanation:
Defend Strategy in the Context of Protectionism
The 'defend' strategy is often associated with protectionism, which is a government's action to shield its domestic industries from foreign competition. This strategy is implemented through various trade barriers. There are three common methods of protectionism:
- Tariffs: These are taxes imposed on imported goods, which make foreign products more expensive and less competitive compared to domestic ones.
- Import Quotas: Limits on the number or value of goods that can be imported, thereby restricting supply and protecting domestic producers.
- Subsidies: Financial support given by the government to domestic industries, which lowers their production costs and allows them to compete more effectively against foreign imports.
Protectionism affects the supply and demand dynamics within markets, influencing the equilibrium price and quantity of goods. By raising trade barriers, a country can defend its domestic industries but may also provoke retaliatory measures from trading partners, potentially leading to a decrease in international trade.