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Why might a government protect an infant industry?

A

Infant industry protection allows new firms to avoid investing in efficient production methods while imports remain expensive.

B

Infant industry protection forces new firms to specialise in exports before they develop domestic demand.

C

Infant industry protection shields established firms until they can charge higher prices without losing domestic market share.

D

Infant industry protection shields new firms until they gain economies of scale and reduce unit costs enough to compete.

Card 1 of 25

6.2.3 arguments for and against protectionism Flashcards

  1. Intl A Level
  2. /Economics
  3. /6.2.3 arguments for and against protectionism

25 flashcards on CIE Intl A Level Economics 6.2.3 arguments for and against protectionism: the key terms and definitions you need to recall.

Flashcards