Countries that engage in international trade benefit from exchange and specialization. Which of the following is not a benefit of a country engaging in international trade?
- Trade enables a country to receive a higher price for its exports.
- Trade increases the power of domestic monopoly firms.
- Trade enables lower prices on imports relative to some domestically produced goods.
Answer: B
Increased foreign competition reduces the monopoly power of domestic firms and forces them to become more efficient. efficeint? is’nt that a benefit
I think C is correct, lower prices could allow domestic companies to go out of business as they cannot compete efficiently against international companies. What are your thoughts?