What are the reasons for international trade such as increased economies of scale?
- Spock (rhp)Lv 79 years agoFavorite Answer
the primary reason is relative advantage in production cost. theory holds that each area [city, region, country, etc.] will hold some relative advantage in something over other areas and those things are the exports they should specialize in.
i believe the term 'relative advantage' was coined by Adam SmithSource(s): grampa