A product is produced in a monopolistically competitive industry with scale economies.If this industry exists in two countries,and these two countries engage in trade with each other,then we would expect
A) each country will export different varieties of the product to the other.
B) the country in which the price of the product is lower will export the product.
C) the country with a relative abundance of the factor of production in which production of the product is intensive will export this product.
D) neither country will export this product since there is no comparative advantage.
E) the countries will trade only with other nations they are not in competition with.
Correct Answer:
Verified
Q21: Intra-industry trade is most common in the
Q22: A monopoly firm will maximize profits by
Q23: Imagine scale economies were not only external
Q23: An industry is characterized by scale economies,and
Q24: If the market for products produced by
Q27: Trade without serious income distribution effects is
Q28: Intra-industry trade will tend to dominate trade
Q29: We often observe "pseudo-intra-industry trade" between the
Q30: International trade based on external scale economies
Q31: Two countries engaged in trade in products
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents