Answer:
The problem with the argument that infant industries need to be protected from foreign competitions are as follows:
1, Fall in standard of living
2. Barrier to free trade
3. Invitation to trade wars
4. Protection of inefficient industries
5. Distortion of free market actors
Explanation:
1. Fall in Standard of Living - Consumers are not forced to patronize producers of substandard products due to the barriers to suppliers of high quality imported goods.
2. Barrier to Free Trade- Trade protection is a barrier to free international trade, the gains of the principles of comparative cost advantage upon which international trade is established will be lost.
3. Invitation to Trade Wars - Other countries may take retaliatory measures
which may eventually lead to trade war between or among trade partners.
4. Protection of Inefficient Industries - The incentive to perform better is not there when infant industries are protected from foreign competitors.
5. Distortion of free market actors - Protection leads to distortion in market equilibrium which will lead to market failure.
