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Explain why countries engage in intra-industry trade

Explain why countries engage in intra-industry trade

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Answer #1

Countries Engage in Intra Industry trade because of its benefits:-

  • Both the businesses and consumers benefit from this trade.
  • It increases the variety of products in the same Industry.
  • Provides varieties of differentiated products with in market.
  • Businesses benefit from Economies of scale.
  • They benefit from the competitive advantages.
  • Producing specific type of products is more comparitive advantage than producing different types of products.
  • Assists Economy during Economic Fluctuations.
  • Intra-Industry trade will result in price Equalization.
  • It helps in maintaining Economic stability.
  • Promotes Innovations.
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