New trade theory points out that through its impact on economies of scale,trade can increase the variety of goods available to consumers and ______average costs of those goods.

Question

Quizplus · Accepted Answer

New trade theory suggests that trade can decrease average costs of goods by allowing firms to achieve economies of scale. By increasing the variety of goods available to consumers, trade also creates more competition, which can further reduce costs. Therefore, the correct choice is C, decrease.

New Trade Theory Points Out That Through Its Impact on Economies