International Trade And Commercial Policy

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International Trade and Commercial Policy


International trade allows us to obtain many of the assets that a country demands, so that citizens fully meet the needs of the country’s individuals, especially in the most developed countries, in which well -being would be greater.

 Then taking this concept we can perceive that international trade should not be regulated by a commercial policy, since it can stagnate free change, affecting the well -being of citizens, since it does not allow the economy to reach optimal parameters for a country for a country.


Classical theory is based on not justifyThe economies of a company, even more affect the average citizen which will not be able to access the products. There are no failures that must be corrected directly by the State.

In the industry that works perfectly the price of equal to the marginal cost, in which there are no extraordinary long -term benefits, but there are only accounting benefits. 

If any industry wants to pass over the marginal costs, the new companies that enter to stabilize the price again making it reduce until they are equal to the marginal cost, this would imply that the extraordinary benefits will disappear, but the State should not intervene in theprocess could cause major dams in the economy leaving a great crisis in companies and therefore in the population.

In order for this competition relationship to be ideal, certain parameters must be met that should not be broken: there can be no barriers to the entrance to the industry, the good that companies offer must be completely identical, with perfect information and without any existingMarket power, no seller must interfere in the price of a good in the market.

An example could be some service companies such as insurance, benches, communication operators, among others, these companies try to promote their service with original advertisements and placing that the quality of the service is more optimal than that of other competitors. The problem that is observed in these types of markets is to not know with total certainty how companies will behave and what will be their next advance.

In the perfect competition companies, only the price goes up to the marginal cost, making the monopolyWhen there are no laws that hinder that natural process or avoid it, that maintains the balance in the market which would be a higher price with a lower amount in the competitive case.

During the sixties, the theory of the industry organization began to be discussed, which tries to relax the alleged perfect competition and give a vision of equal markets or that look more like the reality offered by traditional models where there are no very very strategiesComplex, but this theory does not manage to offer answers to the behavior of these imperfectly competitive markets, it only shows a catalog of possible models that offer almost impossible solutions to be carried out.


These solutions show very diverse options, from non -cooperative games theory with imperfect information, this shows price discrimination, but particle if there is a direct relationship in the way those new theories of international trade have developed.

The behavior of monopolistic markets is analyzed by games theory, with the problems of entry barriers to some industries. Investment in income plus demand (R&D) from the processes of its creation of external effects which projects the rest of the economy and the difficulties to save and protect new innovations with patents.

Free International Trade And Commercial Policy Essay Sample

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