For years, many U.S. corporations made cameras. Today; however, most cameras sold in the United States are imported from Japan and few are manufactured in the United States. Which trade theory does this demonstrate?
The reason is that Japan has less oportunity cost to manufacture cameras than US, so the Japanese companies has an advantage over US companies to compete not on efficiencies but on the cost of the product. Japanese camera won the US market very easily because the japanese camera costs very less to produce in Japan rather than in US. So the comparative advantage theory explains this trade of cameras in international trade with a better explanation.
