The Basis for Trade Is Explained by the Principle of Absolute

question 68

True/False

The basis for trade is explained by the principle of absolute advantage according to David Ricardo and the principle of comparative advantage according to Adam Smith.

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Definitions:

Distributors

Businesses or entities that purchase products from manufacturers and then sell them to retailers or directly to the end-users.

Independent

Refers to entities or individuals that are self-reliant and not influenced or controlled by others in terms of business operations or decisions.

Marketing Channel

A pathway through which goods and services flow from producers to consumers, involving intermediaries such as wholesalers and retailers.

Profits

The financial gain achieved when the revenues from business activities exceed the expenses, costs, and taxes needed to sustain the operation.