Final answer:
Businesses can grow by various types of integrations like backward integration, where a car manufacturer buys a tire company, forward integration, exemplified by a clothing manufacturer opening retail stores, and horizontal integration, such as a tech firm acquiring another in the same industry. Intra-industry trade brings the advantage of economies of scale and competition leading to variety for consumers.
Step-by-step explanation:
In a business context, companies can pursue growth strategies such as backward integration, forward integration, and horizontal integration. An example of backward integration might be a car manufacturer purchasing a tire company to secure its supply chain and reduce costs. For forward integration, consider a clothing manufacturer starting its own retail stores to have direct access to customers. Lastly, an example of horizontal integration would be a tech company acquiring another tech firm that produces the same type of software, to increase market share and reduce competition.
Intra-industry trade has several advantages, including allowing nations to benefit from specialization and economies of scale. Ultimately, this leads to increased competition and more variety for consumers, whether the trade is international or between states in a country. The relationship between economies of scale and intra-industry trade is such that as companies grow larger and produce more, the average costs of production tend to decrease, which can lead to increased trade and competition.