If production is subject to economies of scale,_____.

Question

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Economies of scale mean that as production increases, the average cost of producing each unit decreases. When countries specialize in producing goods for which they have a comparative advantage and then trade, they can achieve higher levels of production and efficiency, benefiting from economies of scale. This specialization and trade allow countries to consume more than they would in isolation (autarky).

If Production Is Subject to Economies of Scale,_____