The infant industry argument for protection makes sense if the infant industry is
A. able to compete against foreign firms now, but not in the future.
B. not able to compete against foreign firms now, but will be able to in the future.
C. not be able to compete now or in the future.
D. able to compete now and in the future.
B. not able to compete against foreign firms now, but will be able to in the future.
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Assume that a perfectly competitive market is in long-run equilibrium. Suppose as a result of a health hazard associated with the industry's product, demand decreases drastically. What is the immediate result of this event?
A) The typical firm's average total cost curve shifts downward. B) The typical firm's marginal cost curve shifts to the left. C) The market price falls and the typical firm suffers an economic loss. D) The market supply increases to offset the fall in demand.
The national defense argument for trade protectionism holds that
A) what is good for business is good for the country. B) what is good for consumers is good for the country. C) consumers' surplus rises by more than producers' surplus falls. D) producers' surplus rises by more than consumers' surplus falls. E) none of the above