If markets are perfectly competitive, the free-trade price of a good in an importing country is expected to be lower than the pre-trade price of the good in that country.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, free trade allows for greater competition and access to cheaper goods from other countries. This increased competition is expected to lower prices for consumers in the importing country.

If Markets Are Perfectly Competitive, the Free-Trade Price of a Good