Concept Introduction:
the applications of Production Possibility Frontier (PPF) and theory of comparative advantage in trade.
It was profitable for Company L to go beyond brokering export and become a major supply chain manager in the world, because of comparative advantage in the labor-intensive industry and associated products.
Explanation of Solution
- When Company L was export broker, it couldn’t take the full advantage of cheap labor. As a supply chain manager, it started outsourcing its various function from different countries of world.
- It did not let its quality product go down and moreover supplied branded clothes at low cost. It could increase its profit by using human resource efficiently and specialization of labor.
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Chapter 5 Solutions
Principles of Macroeconomics, 4th edition, ECO 2020 Wayne State
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