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Infant Industry Argument
Advocates of this maintain that if an industry is just developing, with a good chance of success once it is established and reaping economies of sale, then is it necessary to protect it from competition temporarily until it reaches levels of producdton and cost which allow it to compete with established industries elsewhere, until it can "stand on its own feet". The argument is most commonly used to justify the high level of protection that surrounds the manufacturing industry in developing countries, as they attempt to replace foreign goods with those made in their own country ("import substitution").
Decrease in Demand At the initial equilibrium price P 1 , quantity demanded falls from q 1 to q d . But the quantity supplied is still q 1 at this price. Hence, this
Search and Matching Model It should be clear to you fiom the earlier section that there are a variety of models under the rubric of search theory. In this sec
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Tastes of the buyer must not alter Any alteration which takes place in the taste of consumers will in all probability thwart the working of the law of demand. It frequently hap
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