Final answer:
The higher price of imported products due to trade barriers causes consumers to shift to domestically produced goods which become higher in price because import competition has declined.
The correct option is therefore c. higher in price because import competition has declined.
Step-by-step explanation:
The question addresses the impact of trade barriers on domestic and imported product prices. When trade barriers like tariffs or quotas are put in place, they tend to increase the cost of importing goods. If the prices of imported goods rise due to these barriers, domestic consumers might shift to purchasing domestically produced goods instead.
When trade barriers are introduced, the amount of imported goods usually declines since they become more expensive. This decrease in import competition can allow domestic producers to increase their prices, as consumers have fewer alternatives. Thus, the price of domestically produced products goes up. It's an example of the foreign price effect, which predicts a fall in net export expenditures when domestic price levels rise relative to those in other countries.
The correct option is therefore c. higher in price because import competition has declined.