Consider the infant industry situation. Government assistance through tariff protections is assumedly justified based on market imperfections. Discuss these two market imperfections and why they seem to justify tariffs. Why are the arguments that seem to justify tariffs with the infant industry scenario tenuous at best?
Imposition of tariff by the government is to protect infant industry from the competion industry have to face in the economy.Tarrif act as a protection barrier to the industry from the large industries.It helps the industry to grow and flourised well.It is short term aid given to them to stay in the market in a long run period because there are large number f industries which are well settled and having the control over the large number of buyers so it becaome tough to the infant industries stay in the competion in the market imperfection.
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