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

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In a monopolistically competitive industry, firms differentiate their products to create a unique selling proposition. If two countries engage in trade with each other, each country is likely to specialize in producing and exporting different varieties of the product. This is because the firms in each country will differentiate their products differently, creating comparative advantage in the production of different varieties of the product. Therefore, each country will export different varieties of the product to the other. Choice A is incorrect because monopolistically competitive industries do not typically exhibit factor intensities. Choice B is also incorrect as countries engage in trade to gain access to products they are in competition with. Choice C is incorrect because price alone does not determine exports. Choice D is incorrect as monopolistically competitive industries provide some avenues for comparative advantage.

A Product Is Produced in a Monopolistically Competitive Industry with Scale