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

Transportation costs between and within nations play a significant role in intra-industry trade because they increase the cost of exporting and importing goods, making it more efficient to trade with countries that are geographically closer. This leads to the specialization and exchange of goods within industries, resulting in intra-industry trade. The other choices do not accurately explain intra-industry trade.

Intra-Industry Trade Can Be Explained in Part By