If opening up international trade resulted in Canada importing ballpoint pens,what would tend to happen to the Canadian price of ballpoint pens?

Question

Quizplus · Accepted Answer

When a country opens up international trade, it allows foreign producers to compete with domestic producers. If Canada starts importing ballpoint pens from foreign producers, it will increase the supply of ballpoint pens in the Canadian market.

This increased supply will result in a fall in the domestic price of ballpoint pens as Canadian consumers will have more options to choose from at lower prices. However, if the imported ballpoint pens are of higher quality, Canadian consumers may be willing to pay more for them, leading to a rise in the domestic price. Yet, on average, the most likely outcome is that the domestic price will fall. Therefore, the correct answer is C, the domestic price of ballpoint pens will fall.

If Opening Up International Trade Resulted in Canada Importing Ballpoint