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Chapter 33: Q. 24. (page 804)

Do consumers benefit from intra-industry trade?

Short Answer

Expert verified

Intra-industry trade has evolved to be one of the important macro-economic practices that is beneficial to consumers too.

Step by step solution

01

Step 1. Meaning of trade.

Exchange of products and services from one individual or entity to another in return of money.

02

Step 2. Meaning of intra-industry trade.

It refers to the exchange of similar products belonging to the same industry.

03

Step 3. Consumers benefits from intra-industry trade as:-

a) Intra-industry trade increases the variety of products as the same industry can be highly differentiated and intra-industry trade will provide the opportunity of having a vast range of differentiated products within the markets of trading partners. Thus, this lead to beneficial for the consumers.

b) This intra-industry trade, provide the options to consumers to choose the better product at better value.

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