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Class 10 › Economics › Globalisation and the Indian Economy
CBSE2026Class Class 10 · Economics1 Marks · Mcq✅ Verified
If companies decide to import cotton from other countries, what will be its impact on domestic cotton cultivation? Choose the most appropriate option: I. Less profitable; II. More profitable; III. The price of domestic cotton will decrease; IV. The price of domestic cotton will increase.
A. Only I and IV are correct.
B. Only I and III are correct.
C. Only II and III are correct.
D. Only II and IV are correct.
✅ Answer & Solution
✅ Correct Answer: B
Step 1: When companies import cotton, the total supply of cotton in the domestic market increases. Step 2: With a larger supply and the same demand, competition between imported and domestic cotton increases, so the price of domestic cotton falls - statement III is correct. Step 3: When the price received by the farmer falls while his cost of cultivation remains the same, his profit margin is squeezed, so cotton cultivation becomes less profitable - statement I is correct. Step 4: Statements II and IV state the opposite and are therefore incorrect. Step 5: Hence only I and III are correct - Option (B).
