Which of the following is an advantage of foreign competition?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. Incentive to produce efficiently.
Foreign competition pushes domestic firms to become more efficient to survive. They are pressured to lower costs, improve product quality, and adopt better technologies to compete with international rivals. This drive for efficiency benefits consumers through lower prices and a wider range of higher-quality goods. Ultimately, it leads to a more dynamic and productive domestic economy.