If production is subject to economies of scale,countries can gain from trade if each nation specializes in the production of a good.

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Quizplus · Accepted Answer

If production is subject to economies of scale, then a larger scale of production will result in a lower average cost of production. Specializing in the production of goods where they have a comparative advantage will increase efficiency and result in a higher output at a lower cost. Therefore, countries can gain from trade if each nation specializes in the production of a good.

If Production Is Subject to Economies of Scale,countries Can Gain