The Krugman Economies-Of-Scale "Strategic Trade Policy" Model Stresses That Protection

Multiple Choice

The Krugman economies-of-scale "strategic trade policy" model stresses that protection given to a home firm will, other things equal, __________ the marginal cost of producing each level of home output and will __________ the marginal cost of producing each level of foreign output.

A) decrease; also decrease
B) decrease; increase
C) increase; also increase
D) increase; decrease