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The Diagram Below Shows the Domestic Demand and Supply Curves

Question 26

Multiple Choice

The diagram below shows the domestic demand and supply curves for denim jeans in Canada. The prevailing world price is PW. Assume that all jeans are identical.
The diagram below shows the domestic demand and supply curves for denim jeans in Canada. The prevailing world price is P<sub>W</sub>. Assume that all jeans are identical.    FIGURE 34- 2 -According to the infant- industry argument for protection, a new small industry A) may need protection temporarily until it can exploit its economies of scale. B) must be protected in order to provide a domestic supply of the product. C) will need protection once it has exploited available economies of scale. D) must be protected even if it will never have a comparative advantage. E) must be protected permanently to provide for a diversified economy. FIGURE 34- 2
-According to the infant- industry argument for protection, a new small industry


A) may need protection temporarily until it can exploit its economies of scale.
B) must be protected in order to provide a domestic supply of the product.
C) will need protection once it has exploited available economies of scale.
D) must be protected even if it will never have a comparative advantage.
E) must be protected permanently to provide for a diversified economy.

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