If domestic producers have a comparative advantage in producing a good,
A) trade restrictions will be required before the producers can benefit from their comparative advantage.
B) trade restrictions will still be required before the domestic producers can compete with low-wage producers abroad.
C) they will be able to compete effectively in a competitive world market.
D) the government should subsidize production of the good so the domestic producers will be able to achieve a larger share of the world market.

Question

Quizplus · Accepted Answer

If domestic producers have a comparative advantage, they can produce the good at a lower opportunity cost than other producers, allowing them to compete effectively in a competitive world market without needing trade restrictions or subsidies.

If Domestic Producers Have a Comparative Advantage in Producing a Good