alleryEconomist: Last year, Country Y eliminated tariffs on imported solar panels. In the subsequent twelve months, domestic solar installations increased by 65%. Opponents claimed domestic manufacturers would collapse, but domestic panel production actually grew by 10%. Which of the following, if true, most helps to resolve the apparent paradox regarding domestic panel production?
ACheaper imported panels made residential solar widely affordable, triggering massive nationwide demand for commercial panels that only domestic producers were certified to supply.
BCountry Y experienced above-average hours of sunshine throughout the preceding twelve months.
CThe cost of raw silicon used by foreign solar panel manufacturers remained constant.
DOther nations that maintained solar tariffs experienced stagnant residential installation rates.
EThe domestic currency weakened slightly against foreign currencies over the past three years.
Answer & Solution
Correct answer: A. Cheaper imported panels made residential solar widely affordable, triggering massive nationwide demand for commercial panels that only domestic producers were certified to supply.
Option A resolves the paradox: removing tariffs on imported panels catalyzed overall solar adoption and stimulated huge new commercial demand that only domestic producers were certified to fill, allowing them to grow despite cheap imports.
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