intra-industry specialization

intra-industry specialization

a situation where different firms specialize in particular products within the same industry (see SPECIALIZATION). For example, in the textile industry, one firm may specialize in the production of expensive mohair suits, another in cheap casual wear. Specialization enables firms both to exploit ECONOMIES OF SCALE in production, thereby lowering supply costs, and to accommodate consumers’ demands for greater product variety. See INTRA-INDUSTRY TRADE.
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