The inevitable cost of protecting domestic industries from foreign competition will be higher prices for domestic consumers.

Question

Quizplus · Accepted Answer

When protectionist measures such as tariffs or quotas are implemented to protect domestic industries, it limits competition from foreign competitors, which can result in higher prices for domestic consumers. This is because the protected domestic industries no longer have to compete with lower-priced foreign alternatives, so they can increase their prices without fear of losing business. Therefore, the cost of protectionism is ultimately passed on to domestic consumers in the form of higher prices.

The Inevitable Cost of Protecting Domestic Industries from Foreign Competition