Answer
The domestic price indicates a country's opportunity cost in producing a good. A high domestic price indicates that a country has a high opportunity cost of producing a good, meaning that it does not have a comparative advantage in its production. A low domestic price indicates a low opportunity cost, meaning that it has a comparative advantage in its production.
Work Step by Step
The domestic price provides an indication of a country's opportunity cost in producing a good. A high domestic price indicates that a country has a high opportunity cost of producing a good, meaning that it does not have a comparative advantage in its production. A low domestic price indicates a low opportunity cost, meaning that it has a comparative advantage in its production.