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The government is mulling protecting the shoe industry. It estimates it needs to protect it for 6 years to the tune of $5 billion cost
The government is mulling protecting the shoe industry. It estimates it needs to protect it for 6 years to the tune of $5 billion cost annually. Afterward, the shoe industry will return $200 million annually to the US society. Assume the repayment benefit lasts 100 years and the discount rate is 9%. Based on only economic reasoning and not political reasons, does it behoove the government to aid this industry? You need to explain lucidly what the analysis is. If you just compute numbers, it is not sufficient.
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