If two countries begin trade and both produce a product subject to internal economies of scale,then the country with the rate of production will production until it controls of the market.
A)higher; decrease; 0%
B)lower; increase; 100%
C)lower; increase; 50%
D)higher; increase; 50%
E)higher; increase; 100%

Question

Quizplus · Accepted Answer

When two countries trade and both produce a product subject to internal economies of scale, the country with the higher rate of production will increase its production until it controls 100% of the market due to cost advantages and competitive pricing.

If Two Countries Begin Trade and Both Produce a Product