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 are wealthier than developing countries.
D)high-income industrial economies have dissimilar resource endowments in absolute terms.
E)it allows firms to take advantage of internal economies of scale.

Question

Quizplus · Accepted Answer

Intraindustry trade allows firms to take advantage of economies of scale by producing a variety of similar products within the same industry, thereby reducing costs and increasing efficiency. This is particularly true for high-income industrial economies that have achieved a high degree of specialization and differentiation within industries. Therefore, intraindustry trade is more prevalent in these economies than in developing countries or economies with dissimilar resource endowments.

One Reason That a Large Share of the Trade Between