Question

The following headline appeared in The Times of India:
"Purchase only made-in-lndia gadgets"
Use economic theory to analyse the impact of the statement in terms of competition in the domestic market.

Answer 1

Often this heading comes as an appeal by the government to the citizens of the country. This appeal is expected to offer protection to the domestic industry from foreign competition. Competition in the domestic market is likely to reduce. The market will drift more towards oligopolistic structure in which a few domestic firms dominate the market.