What might result in the absence of trade, if certain products have small national markets?
A) The variety of products available to consumers increases.
B) Limited demand for such products leads to non-realization of economies of scale.
C) Each nation will specialize in producing a narrower range of products than it would in the presence of trade.
D) At low volumes of production, unit costs and prices would be lowered.
E) The first movers in an industry may get a lock on the world market that discourages subsequent entry.

Question

Quizplus · Accepted Answer

Limited demand for products in small national markets can prevent economies of scale from being realized, as production volumes may be too low to reduce costs effectively.

What Might Result in the Absence of Trade, If Certain