Carl’s Flooring sells a variety of rugs and carpets, most of which are imported from Iran. Due to escalating political tensions, however, the United States has just announced sweeping import sanctions on Iran. What is the most likely effect of the sanctions on Carl’s Flooring?

What will be an ideal response?

Carl’s Flooring will face a shortage of rugs and carpets, so it will be forced to either raise prices or go out of business.