The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5

-In the light of the infant industry argument, identify the industry which is likely to have substantially high initial costs.

Question

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5
 
-In the light of the infant industry argument, identify the industry which is likely to have substantially high initial costs.

Quizplus · Accepted Answer

The industry which is likely to have substantially high initial costs is the iron and steel industry. The table shows that at a price of $50, the quantity demanded is 6,000 while the quantity supplied is only 2,000 in the U.S. This suggests that the suppliers in this industry are facing difficulties in meeting the demand, which could be due to high initial costs associated with establishing and maintaining iron and steel production facilities. Therefore, the infant industry argument may apply, which suggests that protective measures may be necessary to allow the industry to develop and compete successfully in the long term.

The Table Below Shows the Quantity Demanded (In Thousands) and Quantity