When a nation's products are first introduced into global markets,that country has a competitive advantage that is not easily overcome in the short-term.This expresses the basis of the _____________________________ of international trade.
A)Product Life Cycle Theory
B)Gravity Theory
C)Comparative Advantage Theory
D)New Trade Theory

Question

Quizplus · Accepted Answer

The given statement is expressing the concept of the Product Life Cycle Theory, which suggests that a country has a competitive advantage in the beginning when it introduces new products in the global market. As the product becomes mature, the advantage decreases and other countries can also compete by introducing similar products. Hence, option A is the correct answer. Option B (Gravity Theory) explains the trade flows between countries based on their size and distance, while option C (Comparative Advantage Theory) explains how countries can benefit from trading with each other by specializing in producing goods that they can produce at a relatively lower opportunity cost. Option D (New Trade Theory) explains how economies of scale and network effects can enhance a country's competitiveness in international trade.

When a Nation's Products Are First Introduced into Global Markets,that