In a high-income country which of the following statements is true with respect to the product cycle?
A) The country would tend to export low-priced versions of goods.
B) The country would tend to import high-priced versions of goods.
C) R&D for high-priced versions of goods would be done in low-income countries where labor is cheaper.
D) The country would tend to import low-priced versions and export high- priced versions of goods.
E) It is unrelated to economies of scale.

Question

Quizplus · Accepted Answer

In a high-income country, the product cycle theory suggests that such countries are more likely to innovate and develop high-priced, high-quality versions of goods for export. Over time, as these products become standardized and other countries learn to produce them, the high-income country may start importing lower-priced versions from countries where the cost of production is lower. This reflects the dynamic nature of comparative advantage and international trade patterns over the product lifecycle.

In a High-Income Country Which of the Following Statements Is