Answer to Question #58149 in Economics for Mmaduabuchi Sopuruchi

Question

What is wrong about government protection on infant industries?

Answer 1

Governmental protection of the infant industries is formulated by Infant Industry Argument. This argument claims that governmental protection is needed for new industries especially those which are in developing countries. This is because those new industries have little chances of competing head-to-head with the established ones. That is why governmental support in needed for their survival, especially for those strategic ones.