Downgrading refers to:
A) the slope of the import demand curve.
B) a decline in tariffs.
C) a decline in average quality when protection is eliminated.
D) the result of deadweight loss.

Question

Quizplus · Accepted Answer

Downgrading refers to a decline in average quality when protection is eliminated. It is a phenomenon that occurs when a reduction in trade barriers leads to greater competition and pressure on domestic producers to cut costs. This can result in a lower quality of goods being produced in order to maintain price competitiveness with foreign imports.

Downgrading Refers To