Import-substitution policies are supported by the fact that many developing countries have small domestic markets and thus their producers enjoy the benefits of diseconomies of small-scale production.

Question

Quizplus · Accepted Answer

Import-substitution policies are typically implemented to encourage domestic production and reduce dependency on imports, not because of the benefits of diseconomies of scale, but rather to try to overcome them by expanding domestic industries.

Import-Substitution Policies Are Supported by the Fact That Many Developing