Question

What is one way geography can affect the prices of a traded good

Answer 1

One way geography can affect the prices of a traded good is by influencing transportation costs. The distance between the production location and the consumer market can impact the expenses associated with transporting the goods. Long distances or challenging terrains can result in higher transportation costs, which can be passed on to consumers as increased prices for the traded goods. Additionally, geography can also affect the availability of certain resources or raw materials, which can further impact the prices of traded goods.