When considering the effects of transportation costs,the conclusions of our trade model must be modified.This is because transportation costs result in:
A) Lower trade volume,higher import prices,smaller gains from trade
B) Lower trade volume,lower import prices,smaller gains from trade
C) Higher trade volume,higher import prices,smaller gains from trade
D) Higher trade volume,lower import prices,greater gains from trade

Question

Quizplus · Accepted Answer

Transportation costs increase the price of imported goods, reduce the volume of trade, and diminish the overall gains from trade by making it less profitable.

When Considering the Effects of Transportation Costs,the Conclusions of Our