Final answer:
Protectionism causes an increase in the price of the protected goods in the domestic market by reducing foreign competition and making imports more expensive. Option A is correct.
Step-by-step explanation:
Protectionism is the economic policy of restricting imports from other countries through methods such as tariffs, import quotas, and other government regulations. Its primary aim is to shield domestic industries from foreign competition. When a country employs protectionism, it invariably leads to an increase in the price of the protected good in the domestic market. This is because imported goods become more expensive or less available, which reduces competition for domestic producers.
As a result, domestic consumers, which may include households or other firms, face higher prices for these goods. Thus, the correct answer to the question of "How does protectionism affect the price of the protected good in the domestic market?" is a) Increases.