Multiple Choice
If production is subject to economies of scale, _____
A) countries can gain from trade if each nation specializes.
B) the domestic price will be above the world price and quantity produced will be below the free-trade level.
C) higher output levels result in higher average production costs.
D) every consumer gets to buy goods at their market-clearing prices.
E) autarky will be preferred to trade.
Correct Answer:
Verified
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