Nations may produce goods where they have disadvantages due to demand biases or even trade barriers.

Question

Quizplus · Accepted Answer

Even if a country has a comparative disadvantage in producing certain goods, they may still produce them due to demand biases or trade barriers that limit the import of these goods. For example, some countries may have high tariffs on imported goods, making it cheaper for their own domestic producers to sell locally despite their disadvantages.

Nations May Produce Goods Where They Have Disadvantages Due to Demand