Which of the following is a problem with the infant-industry argument for protection?
A)Most developed countries increasingly have a larger portion of retirees than youth.
B)Consumer groups become very active in protesting the higher prices that result during infancy.
C)Other countries retaliate by limiting exports of technology needed by the infant industry producers.
D)If the industry does not lower costs sufficiently to be competitive, it becomes a formidable pressure group for continued protection.

Question

Quizplus · Accepted Answer

If the infant industry does not succeed in becoming competitive and relies on protectionist measures, it will become a powerful pressure group that will lobby for continued protection. This can result in welfare loss for the economy as a whole.

Which of the Following Is a Problem with the Infant-Industry