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Infant industry protection can come in the form of Tariffs, Quotas, Non-Tariff-Barriers or any inhibition of free trade in order to protect a *particular* industry (rather than the whole economy) as that particular industry or firm achieves dynamic increasing returns (costs fall with cumulative production rather than with the current rate of production- in other words, costs fall as the firm gains experience). The argument of using tariffs to protect an infant industry are only valid when 1) the protection is for a firm or industry rather than the whole economy, 2) the industry is a potential source for comparative advantage and 3) the protection (usually a tariff) is temporary and ends when the firm becomes internationally competitive (this is especially difficult due to issues with political economy)

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Related Questions

What is an example of an infant industry and how does it demonstrate the concept of infant industry protection?

An example of an infant industry is the solar energy sector. Infant industry protection involves government policies such as subsidies or tariffs to help new industries like solar energy grow and compete with established industries. This support is temporary and aims to help the infant industry become self-sufficient and competitive in the long run.


What are some examples of the infant industry argument and how does it support the protection of emerging industries?

The infant industry argument is a theory that supports protecting new industries from foreign competition until they become strong enough to compete on their own. Examples include tariffs, subsidies, and government regulations. This protection helps emerging industries grow and develop, creating jobs and boosting the economy in the long run.


What are the advantages and disadvantages of protecting an infant industry?

A protected infant industry lacks the incentive to become more effient and competitive, and once it's protected it is difficult to take the protection away. It's only protected because the mature industry wouldn't take it out, the infant industry needs time to grow up and learn.


What is an example of an infant industries example and how do they benefit from government protection and support?

An example of an infant industry is the electric vehicle industry. These industries benefit from government protection and support through policies such as subsidies, tax incentives, and research funding. This helps them overcome initial challenges and compete with more established industries.


What is a infant industry argument?

An infant industry argument is an argument that one person cannot win a competition. Depending to survive, they depend on the government's protectionism and largesse. At a time that is given, with inefficient industries gives low quality goods and a high price. The infant industry argument is criticized for these reasons. The government need a long time to figure out which argument will have growth potential. Because of the market will be smaller, the protectionism could hurt specific infant industry arguments. The justification for protection will disappear in a period of time. It may need protection to build to the point, which can be successfully competed. Small new firms are protected warranty especially in less developed countries.


What is wrong about government's protection of infants industries?

Infant industries


How do tariffs work to protect infant industries?

They shield new industries in the early stages of their development from the competition of more mature rivals.


What was Alexander Hamilton's position on protective tariffs?

Alexander Hamilton favored protective tariffs because it was an essential part of his financial plan. By protecting America's infant domestic economy, he won the favor of the wealthy classes (merchants and manufacturers).


What are some of the features of the Britax Chaperone infant car seat?

Energy-absorbing foam liner, anti-rebound bar, true side impact protection, quick-adjust head restraint, tangle free five-point harness and a no-rethread harness are some of the features of the Britax Chaperone infant car seat. It provides some of the best impact safety in the industry.


Who was Marion Donovan?

Marion Donovan revolutionized the infant care industry by inventing the prototype of the disposable diaper.


What has the author Eduardo Luzio written?

Eduardo Luzio has written: 'Measuring the performance of a protected infant industry'


Was the infant mortality high or low in the middle ages?

protection are been used among them.. such as condom etc..