Infant industries can be described as?

1. Analyze the question The question asks what "infant industries" means in economics. It is a definition question, and the term comes from the topic of international trade and protectionism.

2. Explain the concept An infant industry is a newly established industry that has not yet grown enough to compete with older, well-established foreign firms. These industries usually have:

• High production costs, because output is small and they do not yet enjoy economies of scale
• Little experience and a small market share
• A need for temporary support, such as tariffs, quotas, subsidies, or import bans

This is the infant industry argument for protection. The idea is that government shields young industries until they are strong enough to compete on their own. Nigeria has used this argument to justify protecting local industries like textiles, cement, and assembly plants.

3. Step-by-step solution

• Option A, newly established industries: This matches the standard definition. ✔
• Option B, industries enjoying tax holidays: A tax holiday is one incentive that may be given to new industries, but it does not define them. ✘
• Option C, industries producing baby products: This is a literal reading of "infant" and is a distractor. ✘
• Option D, newly commercialized industries: This sounds close, but "commercialized" refers to turning something into a profit-making enterprise, such as commercializing a public enterprise. It is not the standard definition. ✘

4. Answer Infant industries are newly established industries, so the answer is A.

5. Exam tip Do not read "infant" literally. In economics, "infant" means "young or newly started." When you see "infant industry," think new industry plus temporary protection. Also remember that tax holidays are an incentive, not a definition.