What is the reason for international business?

Question

Offloading an abundance of products to other countries for profit.

To help the growth of under-developed countries

Distributing resources equally among different countries

Leveraging the comparative advantage of different countries.

Answer 1

The primary reason for international business is leveraging the comparative advantage of different countries. This concept suggests that countries can benefit from trading with one another by specializing in the production of goods and services for which they have a lower opportunity cost. By doing so, they can increase efficiency, reduce costs, and enhance overall economic welfare while gaining access to a wider variety of products and services.

While other points such as offloading products for profit, helping the growth of under-developed countries, and distributing resources can play a role in international business, they are not the foundational reason for its existence. The core concept of comparative advantage is what drives international trade and business activities.