Question

foreign trade and interaction of market

Answer 1

Foreign trade gives opportunities to producers and consumers to reach beyond the markets of their own country.

Goods travel from one country to another.

Prices of similar goods tend to become equal in different markets.

Producers can now compete with other producers who are in other parts of the world.

This all leads to expansion of business.

Example: During Diwali season buyers have an option to choose between Indian and Chinese decorative lights.

Thus, foreign trade leads to integration of markets across countries.

Hope this helps!!