According to new trade theory,which of the following is most likely to be a result of market expansion due to trade?
A) A wide variety of products is produced at greater unit costs than in the absence of trade.
B) As the variety of products increases,demand for individual products decreases,leading to non-realization of economies of scale.
C) Each nation may specialize in producing a narrower range of products,importing goods that it does not make.
D) The ability to capture first-mover advantages is restricted in a world that allows trade.
E) When countries do not differ in their resource endowments or technology,trade does not offer mutual benefits.
Correct Answer:
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