The diagram below shows the domestic demand and supply curves for cotton towels in Canada. The prevailing world price of cotton towels is P W . Assume that all cotton towels are identical.
FIGURE 34- 3
-When a country chooses to protect domestic industries from foreign competition, it will incur a cost in the form of

Question

The diagram below shows the domestic demand and supply curves for cotton towels in Canada. The prevailing world price of cotton towels is P W . Assume that all cotton towels are identical.
  FIGURE 34- 3
-When a country chooses to protect domestic industries from foreign competition, it will incur a cost in the form of

Quizplus · Accepted Answer

Protecting domestic industries often leads to higher prices for consumers, reducing their purchasing power and thus lowering material living standards.

The Diagram Below Shows the Domestic Demand and Supply Curves