Question

domestic telecommunication companies in the united states are struggling due to foreign competition. how can the us government help to resolve this situation? the government should implement quotas as they would help domestic businesses lower the costs of labor and capital goods on which they rely and thus become more competitive. the government should implement subsidies as they would help domestic businesses be able to afford to lower the prices of their goods and thus become more competitive. the government should implement quotas as they would artificially raise prices for foreign goods relative to domestic goods and thus help domestic producers become more competitive. the government should implement subsidies as they would limit the amount of foreign goods available to consumers and thus help domestic producers become more competitive.

Explanation:

Quotas limit the quantity of foreign - produced goods that can enter a country, which artificially raises the prices of foreign goods relative to domestic goods, giving domestic producers a competitive edge. Subsidies are payments by the government to domestic producers, which allow them to lower their prices and be more competitive. However, subsidies do not limit the amount of foreign goods available to consumers. Quotas do not lower the costs of labor and capital goods for domestic businesses.

Answer:

The government should implement quotas as they would artificially raise prices for foreign goods relative to domestic goods and thus help domestic producers become more competitive.