Refer to the information provided in Figure 19.3 below to answer the questions that follow.
Figure 19.3
-Refer to Figure 19.3.The domestic price of shoes is $80.After trade the price of a pair of shoes is $60.Now domestic production costs fall so that the equilibrium domestic price of a pair of shoes is $70.This would cause

Question

Refer to the information provided in Figure 19.3 below to answer the questions that follow.
  Figure 19.3
-Refer to Figure 19.3.The domestic price of shoes is $80.After trade the price of a pair of shoes is $60.Now domestic production costs fall so that the equilibrium domestic price of a pair of shoes is $70.This would cause

Quizplus · Accepted Answer

If the domestic production cost falls and the equilibrium domestic price of a pair of shoes is $70, then the domestic price of shoes will be lower than the world price of shoes ($60). This would reduce the incentives for producers to export and increase the incentives for consumers to import, leading to a decrease in the number of pairs of shoes imported into this country.

Refer to the Information Provided in Figure 19