explain why subsidies to domestic firms act as a


Explain why subsidies to domestic firms act as a trade barrier.

A trade barrier is broadly explained as any market intervention whereby the ratio of price of exports to price of imports goes down. Therefore, a subsidy will lower the domestic price of goods - ceteris paribus - and unfairly benefit domestic producers over foreign.

 

Request for Solution File

Ask an Expert for Answer!!
Microeconomics: explain why subsidies to domestic firms act as a
Reference No:- TGS0313318

Expected delivery within 24 Hours