Explain why the U.S. would subsidize the short run cost of production for tobacco farmers in foreign countries. Do these practices guarantee the tobacco farmers a profit in the short run? Long run? Explain.© BrainMass Inc. brainmass.com October 9, 2019, 7:04 pm ad1c9bdddf
U.S. tobacco companies want to create strong incentives for local farmers in developing countries to grow tobacco instead of crops used for domestic food production by offering underwritten loans, subsidies for startup costs, and a guaranteed demand for their tobacco crops.
In economics, the theory of comparative advantage explains why it can be beneficial for two countries to trade, even ...
The solution provides detailed explanations and discussions for the problem.