1. How does global economic competition impact the price elasticity in the domestic market and decisions related to the strategy a firm uses to compete?
2. Who have been the winners and losers as a result of NAFTA (Countries in NAFTA trade agreement are the U.S., Canada and Mexico)? Explain your answer.
*Please include all necessary references!
Solution - 1
Effect of Global Economic Competition on Price Elasticity
The increasing global economic competition prominently make an effect on the price elasticity of a product in the domestic market along with on the decisions related to the strategy a firm uses to compete. This can be understood with an example of a product gasoline that's price had experienced many fluctuations' in past few years. The prices of gasoline in the international market had frequently changed with the regular fluctuations in the gas prices. This regular fluctuation in gas prices is due to the global economic competition and it had made an impact on all the business activities and the household work, as in all this gasoline is used as an essential fuel component.
This increasing global economic competition in the demand of the fuel in all the countries of the world is due to the growing population and globalization of the business units. Because of fluctuation in the prices of gasoline, the economy of the particular country also fluctuates as its price elasticity gets impacted by global economic competition (Gundzik, ...
The expert examines the global competition impact on price elasticity for winners and losers or NAFTA.