Which of the following statements most likely undermines the infant-industry argument?
A)Total unit costs decrease through economies of scale.
B)High tariffs to prevent foreign competition increase government revenues in the protected country.
C)Domestic entrepreneurs need assistance to compete in industries with high entry barriers.
D)Experience of operating over time triggers higher productivity and global competitiveness.

Question

Quizplus · Accepted Answer

The infant-industry argument suggests that emerging domestic industries need protection from international competition until they become mature and competitive. Statement B, which mentions that high tariffs increase government revenues, does not support this argument. Instead, it focuses on a benefit to the government's finances rather than on the development and competitiveness of the infant industry. The other options (A, C, D) all provide reasons why protecting young industries might help them grow and become competitive, which aligns with the infant-industry argument.

Which of the Following Statements Most Likely Undermines the Infant-Industry