Answer to Question #234005 in Macroeconomics for Gontse

Question

If foreign competition for South Africa producers of textiles increased, then we would expect the demand for domestically produced textiles to

Answer 1

The demand for domestically produced textiles will be worse off thus leading to less profits due to fewer sales of domestically produced goods. The South African producer will be under pressure to change their model because of the foreign competition that has entered the domestic market