Which of the following best describes the impact of globalization on domestic markets in the United States?

• A. Globalization has increased competition, leading to lower prices and greater variety for consumers.
• B. Globalization has reduced the availability of imported goods in domestic markets.
• C. Globalization has eliminated all domestic industries in the United States.
• D. Globalization has caused domestic markets to become completely isolated from international influences.

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of globalization in microeconomics, which refers to the increasing integration of economies through trade, investment, and technology, leading to more interaction between domestic and international markets.
2. Step 2: Analyze how globalization affects domestic markets by considering the entry of foreign goods and services, which increases competition among producers within the domestic market.
3. Step 3: Recognize that increased competition typically leads to lower prices for consumers because firms strive to attract buyers by offering better deals.
4. Step 4: Note that globalization also tends to increase the variety of goods and services available to consumers, as imports bring in products that may not be produced domestically.
5. Step 5: Evaluate the incorrect options by understanding that globalization does not reduce the availability of imported goods, nor does it eliminate all domestic industries or isolate domestic markets from international influences.