Question

Country A currently imports solar panels at $30,000 each. The government is using only 10% of the program as domestic content, exporting clean energy to neighboring countries. Country B imports also solar panels at $25,000 each, but uses 70% of the program as domestic content. If both countries produced solar panels home, the costs would have reached $25,000 for country A and $20,000 for country B, but there would have been an initial shakedown period during which solar panels would cost $35,000 for country A to produce and $40,000 for country B to produce. Suppose each country must go through a shakedown period of high costs on its own, before accessing any financial support from abroad. Under what circumstances would the existence of the initial high costs justify infant industry protection?

Answer 1

• As I would like to think, remembering the newborn child indurty argment which expresses that baby ventures need insurance from its worldwide rivals.
• I accept, nation B would be fruitful in saving the contention since it utilizes 70% of the residential substance which is in alignmet to the newborn child industry argment as one of the targets is to creat business.   
• And abilities in the household matrkets and maek them sufficiently proficient to contend in universal markets.
• Nation B will do this in its economy.   
• Likewise the expense of delivering the sun based boards locally would be less expensive for counrty B which will make local makers increasingly desireable in the global markets and the business would get independent.