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If Two Countries Begin Trade and Both Produce a Product

Question 3

Multiple Choice

If two countries begin trade and both produce a product subject to internal economies of scale, then the country with the ________ rate of production will ________ production until it controls ________ of the market.


A) higher; increase; 50%
B) higher; increase; 100%
C) higher; decrease; 0%
D) lower; increase; 50%
E) lower; increase; 100%

Correct Answer:

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