Governments sometimes subsidize domestic industries.When this occurs,
A)the governments also impose tariffs on imports to protect the industries even more.
B)the subsidized industries have an advantage on international markets relative to non-subsidized industries.
C)firms cannot be guilty of dumping because their prices are not below their costs.
D)the subsidized industries sell less in international markets because it is more profitable to sell domestically.

Question

Quizplus · Accepted Answer

Subsidized industries have an advantage on international markets relative to non-subsidized industries because they can produce goods at a lower cost and offer them at lower prices, which can attract more customers. This can lead to increased market share and potentially harm non-subsidized industries. However, governments may also impose tariffs to further protect domestic industries. Dumping can still occur, regardless of whether or not the industry is subsidized, as it refers to selling goods below market value, not below cost. While it may be more profitable for subsidized industries to sell domestically, they may still choose to sell in international markets to further increase their profits and market share.

Governments Sometimes Subsidize Domestic Industries.When This Occurs