What represents a plausible consequence of engaging in international trade?
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Answer: A. Monopoly in the home market becomes an oligopoly in the world market
Explanation
Opening up to international trade allows a single domestic monopoly to face global competitors, transforming its market status into an oligopoly on the world scale. Introducing foreign firms breaks domestic market dominance, shifting industry control among a handful of major global enterprises. Trade globalization expands market boundaries, causing previously isolated monopolies to compete internationally. A monopoly exists when a single enterprise controls the entire supply of a good or service within a market. An oligopoly features a small number of large firms dominating an industry and influencing global pricing structures. International trade removes protectionist barriers, exposing domestic industries to worldwide competitive pressures.
An oligopoly becoming a monopoly in the world market reverses the typical decentralizing effect of international trade. A purely competitive firm lacks market power, so exposure to global trade does not automatically turn it into an oligopolist. Purely competitive firms cannot transform into monopolies simply by engaging in international trade without acquiring market share.
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