While short-run factor intensity reversals lead to industrial shut-downs when there are two productive factors, this paper shows that an industry can undo an intensity reversal over the medium run and avoid shutting down when there are three or more factors. Medium-run adjustment begins with a...

It is shown that a tariff can lower payment to a productive factor used only in (specific to) the protected industry in a simple production model. This may occur anytime the protected sector shares more than one common factor with the rest of the economy, as seems most likely. Intuition based on...