Intraindustry trade is characterized by what two features of the industry and market?
A)Diseconomies of scale and homogeneous products
B)Non-tariff barriers and large-scale foreign investment
C)Quota auctions and low effective rates of protection
D)Economies of scale and differentiated products
E)Government subsidies and industrial policy

Question

Quizplus · Accepted Answer

Intraindustry trade is characterized by two key features - economies of scale and differentiated products. Economies of scale refer to the cost advantages that come with producing a large volume of output, while differentiated products refer to products that are perceived as different by consumers but are still within the same industry classification. These two features allow firms within the industry to specialize in certain types of production and gain a competitive advantage in the market.

Intraindustry Trade Is Characterized by What Two Features of the Industry