The imperfect markets theory states that factors of production are somewhat immobile, allowing firms to capitalize on a foreign country's resources.

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The imperfect markets theory suggests that certain factors of production, such as labor or capital, are not completely mobile across borders, creating opportunities for firms to exploit differences in resource availability or costs. This can lead to the phenomenon of international trade, where countries specialize in producing goods or services that they have a comparative advantage in and then trade with other countries to obtain products they cannot produce as efficiently.

The Imperfect Markets Theory States That Factors of Production Are