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If a Country Produces a Commodity in the Range of Decreasing

Question 22

Multiple Choice

If a country produces a commodity in the range of decreasing returns to scale, and the country begins to export more in a pure free trade system, the domestic price of the commodity will


A) fall.
B) rise.
C) exceed the price in foreign countries.
D) be below the price in foreign countries.
E) One cannot predict the impact on the price of the commodity.

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