Question

Intra-industry trade theory:

a. explains why the United States might export autos and import clothing

b.  ignores seasonal considerations for agricultural goods

c. assumes that transport costs are very low or do not exist

d. explains why the United States might export and import differentiated versions of the same product, such as different types of autos

Answer 1

Intra industry trade theory will explain why the United States might export and import differentiated versions of the same product such as different types of autos.

It is the exchange of similar product within the same industry.this term is applicable to the international trade where import and export of similar product is done.

It is not about transportation cost or seasonal consideration or different products.

Correct answer is option ( d)explains why the United States might export and import differentiated versions of the same product, such as different types of autos