Modern theory of international trade ignou
modern theory of international trade Course Title : International Business Environment Assignment Code : Q-1 Critically examine the modern theory of international trade. Solution - The contemporary theories of trade deviate from the assumptions of perfect competition and constant returns to scale made both in classical and the neoclassical models, Modern theory takes a more pragmatic approach emphasizing a market structure having monopolistic or oligopolistic character and economy of scale in production. In former cases a large number of producers produce goods that's are not identical but not differentiated in quantity or design. in the latter case, only a few producers serve the market with either identical products or differentiated products. the products which are just differentiated horizontally are similar in quantity but different in design like a red pen and a blue pen, white wine and red wine or wooden furniture an...