Which of the Following Is FALSE About Intraindustry Trade

question 8

Multiple Choice

Which of the following is FALSE about intraindustry trade?

• A)Economies of scale allow firms to enjoy lower average costs.
• B)It creates gains from trade.
• C)It is due to comparative advantage.
• D)It may involve heightened competition and lower prices for consumers.
• E)It increases consumer choice.

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Definitions:

Target Cost

is the estimated price at which a product needs to be sold in the market, guiding the design and manufacturing process to ensure profitability.

Fixed Costs

Costs that do not change with the level of output or activity, such as rent or salaries.

Units Produced

The number of complete items manufactured or produced within a given timeframe.

Cash Discount

A reduction in the invoice price offered by sellers to buyers as an incentive for early payment before the established due date.