According to strategic trade theory, a national government can make its country better off if it implements trade polices that improve the competitiveness of its firms in oligopolistic industries.

Question

Quizplus · Accepted Answer

According to strategic trade theory, a national government can implement policies to support its firms in oligopolistic industries, like subsidies or export promotion, to improve their competitiveness and increase their market power. This can lead to higher profits and improved economic performance, benefiting the country as a whole. However, this approach also has its critics who argue that it can lead to trade disputes and distortions in competition.

According to Strategic Trade Theory, a National Government Can Make