Question: 5. Let us assume that we have two countries, Holstein (H) and Mecklenburg (M). There are three big cities (C) in each country and three

5. Let us assume that we have two countries, Holstein (H)

5. Let us assume that we have two countries, Holstein (H) and Mecklenburg (M). There are three big cities (C) in each country and three identical factories (F) in each country too, producing just the same good. Assume that there are no trade barriers between these two countries and that transportation costs per kilometer are the same. The next table shows the distances (in kilometers) from each factory to each city: Explain whether there is going to be (or not) intra-industry trade between Holstein and Mecklenburg in this product

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