Why has much clothing manufacturing moved from the United States to other countries?

• A. Labor costs are generally lower in other countries, making production more cost-effective for firms.
• B. The United States has stricter environmental regulations that prohibit clothing manufacturing.
• C. Other countries have a higher demand for clothing produced in the United States.
• D. Clothing manufacturing technology is only available in other countries.

Answer: (A)

Verified step by step guidance

1. Identify the key economic concept involved: this question relates to the principle of comparative advantage and cost minimization in production.
2. Understand that firms seek to minimize production costs to maximize profits, and labor cost is a significant component of total production cost in clothing manufacturing.
3. Recognize that many other countries have lower wages and labor costs compared to the United States, which makes manufacturing there more cost-effective for firms.
4. Consider other factors such as environmental regulations or technology availability, but evaluate whether these factors primarily drive the relocation of manufacturing.
5. Conclude that the main reason clothing manufacturing has moved is due to lower labor costs abroad, which aligns with firms' incentives to reduce costs and remain competitive.