What Is Most Likely to Happen When Firms in an Import-Competing

Multiple Choice

What is most likely to happen when firms in an import-competing infant industry are offered subsidies?

A) The firms will suffer from diseconomies of scale.
B) The firms will be able to sustain only if they charge a higher price than the foreign firms.
C) The firms will be able to charge a price equal to the world price and still earn a profit.
D) The firms will face a perfectly inelastic demand curve.