To minimize losses to consumer surplus,protection for infant industries should be provided through:

Question

Quizplus · Accepted Answer

Subsidies are the best choice for protecting infant industries while minimizing losses to consumer surplus. Subsidies provide financial support to domestic industries, which allows them to compete with established foreign businesses without putting the burden of higher prices on consumers. This ensures that the benefits of protection are enjoyed by both domestic industries and consumers. Quotas limit the quantity of foreign goods that can be imported, which can lead to higher prices and reduced choice for consumers. Tariffs increase the price of imported goods, which again results in higher prices for consumers. An overvalued exchange rate reduces the competitiveness of domestic industries, which can lead to greater losses for both industries and consumers.

To Minimize Losses to Consumer Surplus,protection for Infant Industries Should