When the residents of a nation are free to trade with foreigners, domestic producers will be able to
A) export more goods for which they are a high-cost supplier.
B) supply a larger quantity of goods they can produce at a relatively low cost.
C) charge higher prices then would otherwise be the case.
D) survive in the marketplace even if they do not produce efficiently.

Question

Quizplus · Accepted Answer

When domestic producers are free to trade with foreigners, they can specialize in producing goods they can produce at a relatively low cost. This will enable them to supply a larger quantity of goods to the market, which will increase their revenue and profits. This will also improve their efficiency and competitiveness, which will benefit the economy as a whole.

When the Residents of a Nation Are Free to Trade