If the infant industry argument is used to protect an industry that has already matured, then
A) consumers lose because they will pay a price for a product that is above the world price.
B) consumers lose because they will pay a price for a product, which is less than the world price.
C) stockholders lose because the firm cannot compete with other firms.
D) no one loses.

Question

Quizplus · Accepted Answer

The infant industry argument is used to protect a new industry that has not yet matured and does not have the capacity to compete with already established industries. If this argument is used to protect a mature industry, then it is likely that the industry is already able to compete on its own and does not need protection. If protection is still given, consumers will pay a price above the world price, which is not in their best interest.

If the Infant Industry Argument Is Used to Protect an Industry