One reason that a large share of the trade between high-income industrial economies is intraindustry trade is because
A)it is more advantageous than interindustry trade.
B)high-income industrial economies produce in the first stage of the product cycle.
C)high-income industrial economies have dissimilar resource endowments in absolute terms.
D)it allows firms to take advantage of internal economies of scale.

Question

Quizplus · Accepted Answer

Intraindustry trade allows firms to take advantage of internal economies of scale, which can lead to lower costs per unit of production and thus improved competitiveness. This is especially true for high-income industrial economies, which often have advanced production processes and specialized technologies that allow for greater efficiency and productivity gains. Additionally, intraindustry trade allows for greater product differentiation, which can result in higher profit margins for firms.

One Reason That a Large Share of the Trade Between