According to the infant-industry argument, protection should be withdrawn from an infant industry when the companies in the industry
A) are listed on the domestic stock exchange.
B) become profitable.
C) double their sales revenues.
D) reach a sufficient size to compete with foreign firms.

Question

Quizplus · Accepted Answer

According to the infant-industry argument, protection should only be withdrawn when the industry has developed enough to compete with foreign firms. Therefore, option D, which states that protection should be withdrawn when the companies reach a sufficient size to compete with foreign firms, is the best choice. The other options, such as being listed on the domestic stock exchange or doubling sales revenues, are not necessarily indicators of the industry's ability to compete globally. Profitability may also not be an accurate measure of the industry's readiness to compete with foreign firms.

According to the Infant-Industry Argument, Protection Should Be Withdrawn from an Infant