Question

Do consumers benefit from intra-industry trade?

Short answer

Intra-industry trade has evolved to be one of the important macro-economic practices that is beneficial to consumers too.

Step-by-step solution

Step 1. Meaning of trade.

Exchange of products and services from one individual or entity to another in return of money.

Step 2. Meaning of intra-industry trade.

It refers to the exchange of similar products belonging to the same industry.

Step 3. Consumers benefits from intra-industry trade as:-

a) Intra-industry trade increases the variety of products as the same industry can be highly differentiated and intra-industry trade will provide the opportunity of having a vast range of differentiated products within the markets of trading partners. Thus, this lead to beneficial for the consumers.

b) This intra-industry trade, provide the options to consumers to choose the better product at better value.