Intraindustry trade is characterized by what two features of the industry and market?
A)Diseconomies of scale and homogeneous products
B)Non-tariff barriers and large-scale foreign investment
C)Quota auctions and low effective rates of protection
D)Economies of scale and differentiated products

Question

Quizplus · Accepted Answer

Intraindustry trade is characterized by economies of scale, which make it advantageous for firms to produce on a large scale and reap the benefits of lower costs per unit. Differentiated products, which have unique features that distinguish them from competitors, are also common in intraindustry trade. This allows firms to compete on factors other than price, such as quality, design, or marketing.

Intraindustry Trade Is Characterized by What Two Features of the Industry