A basic problem with the infant-industry argument is that a. most industries need protection when they are mature, not when they are first established. b. the amount of the tariff is unlikely to have much impact on the success of an infant industry. c. political pressure will likely prevent the withdrawal of the tariff when the industry matures. d. domestic consumers will continue to buy the foreign products anyway, regardless of the tariff.

Question

Social Studies

Leah Burgess

6 December, 18:47

A basic problem with the infant-industry argument is that a. most industries need protection when they are mature, not when they are first established. b. the amount of the tariff is unlikely to have much impact on the success of an infant industry. c. political pressure will likely prevent the withdrawal of the tariff when the industry matures. d. domestic consumers will continue to buy the foreign products anyway, regardless of the tariff.

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German Callahan · Answer 1

The answer is C - Political pressure will likely prevent the withdrawal of the tariff when the industry matures.

Explanation:

Tariff is a tax or duty paid on a particular class of import and are usually levied by domestic government in order to protect new industries against foreign competition and to protect against foreign companies which offer lower prices than their cost and to raise revenue. This makes domestic goods cheaper or domestic consumers and imported goods more expensive for companies exporting goods from their industry into the domestic industry.

Once maturity of the infant-industry (or new industry) is attained and it can withstand competition and attain efficiency then the tariff can be withdrawn.

However, sometimes it can become too difficult to withdraw tariff because even after maturity the industry becomes too much dependent on tariff and other countries.