Is the Call for Protection on the Basis of "Infant

question 171

Multiple Choice

Is the call for protection on the basis of "infant industry" valid?

• A)No, because protection has no place in industrial development.
• B)No, protection is always improper.
• C)Uncertain, economic theory has no answer to this question.
• D)Yes, although it can be overstated and abused.

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Definitions:

Profit-maximizing Output

The level of production at which a firm's marginal cost equals its marginal revenue, leading to the highest possible profit.

Cournot Model

A model of oligopoly in economics where competing firms simultaneously and independently decide on the quantity of production, leading to a strategic interaction.

Maximize Revenues

Strategies or actions taken by a business to increase its total income from sales or other sources as much as possible.

Cartel

An agreement among competing firms to control prices or exclude entry of a new competitor in a market, often to maximize their collective profit.