An Assumption Behind the Infant-Industry Argument for Tariff Protection Is

question 197

Multiple Choice

An assumption behind the infant-industry argument for tariff protection is that

• A) foreign competitors are selling output below average cost.
• B) the domestic industry will be facing an upward adjustment in its average cost.
• C) the domestic industry will eventually gain a comparative advantage in producing the good.
• D) the market needs additional competition to satisfy consumer demand.

---

Definitions:

Accounts Payable

Accounts payable is the balance of money owed to suppliers or creditors for goods or services purchased on credit, which is typically a short-term liability.

Inventory Increase

A rise in the total value or amount of goods held by a company intended for sale or production.

Cost of Goods Sold

The direct costs associated with producing goods sold by a business, including materials and labor.

Statement of Cash Flows

A financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company.