Standard trade theory is based on perfect competition, with constant returns to scale at the level of the individual firm and constant or increasing cost of expanding production at the level of the industry. Comparative advantage predicts that countries will trade with other countries that are different (the source of the comparative cost differences) and that each country will export some products and import other, quite different, products. While much international trade conforms to these patterns, a substantial amount does not. Most obviously, industrialized countries trade a lot with one another, and much of their trade each is exporting and importing similar products.
Develop a detailed paper analyzing intra-industry international trade. Your paper should be APA format and structured as follows:
Cover page with a running head
Introduction
Economies of scale
Monopolistic competition and the gravity model of trade
Global oligopoly (strategic trade policy)
Agglomeration economies (external economies of scale)
Conclusions
References
Your paper should be between 1450 and 2000 words.
