A government subsidy to an industry having increasing returns to scale in order to capture international market share is an example of

Question

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This scenario describes the use of strategic trade policy, which involves government intervention to help domestic industries gain a competitive advantage in global markets. A subsidy to an industry with increasing returns to scale would make it more cost-effective to produce a higher quantity of the product, which could then be sold at a lower price to capture more international market share. This strategy relies on the idea that governments can improve their country's economic welfare by identifying and supporting industries that have a comparative advantage in certain products.

A Government Subsidy to an Industry Having Increasing Returns to Scale