Problem 23

Introduction

Intra-industry trade can be defined as a global trade of goods or products within the same industry. For example, if an automobile industry of the U.S. is trading, importing, and exporting its product with the same industry but in a different country.

Economist David Ricardo gave the theory explaining the fact why different countries do trade with each other, the theory is known as the theory of comparative advantage. The theory states that the maximum profit can be gained from the international trade of the products which is the specialty of the country.