Final answer:
Significant cost differences between competing firms in the value chain can occur in production, design and engineering, and marketing, affecting international trade and contributing to differing competitive advantages.
Step-by-step explanation:
The three main areas in the value chain where significant differences in the costs of competing firms can occur include production, design and engineering, and marketing. Production costs can vary due to economies of scale, which allow firms with large-scale production to dramatically lower average costs, shaping the nature of international trade and market competition. Firms can also differ in design and engineering costs, as some may invest heavily in innovation, contributing to the slicing up the value chain as different stages of production can occur in different regions based on comparative advantage and specialization. Finally, marketing costs can be a major differentiator, as firms allocate resources to advertising and promoting their products differently, influencing their competitive positions in the market.