Governments Sometimes Subsidize Domestic Industries. When This Occurs

question 133

Multiple Choice

Governments sometimes subsidize domestic industries. When this occurs

• A) the governments will not impose tariffs.
• B) the subsidized sell less in international markets because it is more profitable to sell at home.
• C) the subsidized industries have an advantage on international markets relative to non-subsidized firms. For this reason, other countries often impose tariffs on the subsidized imports.
• D) the subsidized industries have an advantage on international markets relative to nonsubsidized firms. However, this is not an argument for imposing tariffs and tariffs would violate international agreements.

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Definitions:

Demand Conditions

The market requirements and consumer preferences that influence the demand for goods and services, including price, quality, and accessibility.

Cost Conditions

The factors that influence the expenses associated with producing goods and services, including materials, labor, and overhead.

Produced Quantity

The amount of goods or services generated by the production process within a specific time frame.

Monopolist

An entity that is the sole provider of a particular product or service in a market, giving it significant control over that market's prices and supply.