A problem encountered when implementing an "infant industry" tariff is that
A) domestic consumers will purchase the foreign good regardless of the tariff.
B) the industry may never "mature."
C) most industries require tariff protection when they are mature.
D) the tariff may hurt the industry's domestic sales.
E) the tariffs fail to protect the domestic producers.

Question

Quizplus · Accepted Answer

The problem with implementing an "infant industry" tariff is that the industry may never "mature." If the industry does not become competitive and efficient, it will continue to require tariff protection, which can harm the economy as a whole in the long run. Additionally, the tariff may hurt the industry's domestic sales by making the final product more expensive for consumers, leading to decreased demand.

A Problem Encountered When Implementing an "Infant Industry" Tariff Is