Intra-industry trade can be explained in part by
A) Adam Smith's principle of absolute advantage.
B) perfect competition in product markets.
C) diseconomies of large scale production.
D) transportation costs between and within nations.

Question

Quizplus · Accepted Answer

Intra-industry trade occurs when countries trade similar goods and services with each other. Transportation costs play a significant role in this type of trade as it affects the competitiveness of exports and imports. Hence, option D, transportation costs between and within nations, is the best explanation for intra-industry trade.

Intra-Industry Trade Can Be Explained in Part by