In industries in which a trading partner has a comparative advantage, domestic firms typically lose market share.
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What is a market share?</h3>
Market share is the portion of a company's business that represents the entire revenue or sales in a market. For instance, if an industry sells 50,000 units annually, a company selling 5,000 of those units would hold a 10% share of the market.
"Because this will show if expectations are to be met by growing with the market or by stealing share from competitors, marketers need to be able to translate and incorporate sales targets into market share. The latter is usually always more challenging to accomplish. Market share frequently influences strategic or tactical action and is regularly watched for any indications of shifts in the competitive environment."
Explanation:
(i)A free trade agreement is a pact between two or more nations to lower export and import restrictions between the parties.
(ii)Free trade agreements may result in decreased output and the loss of American jobs in some sectors since domestic companies often lose market share in sectors where a trading partner has a comparative advantage.
(iii)This means that the trading partner can create the goods at the lowest opportunity cost if it possesses comparative advantage methods. As a result, the trading partner nation produces a greater number of commodities at the lowest possible cost, increasing the likelihood of trade. As a result, it lowers American production, which results in the loss of market share and jobs for Americans in several industries.
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