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What would you expect to be pattern of international trade

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Reference no: EM132332746

Question: Consider a situation in which two countries can produce a good that is subject to external economies of scale. Assume that firms in both countries face the same average costs curve, so that their supply curves are identical.

a) What would you expect to be the pattern of international trade? What would determine who produces the good?

b) What are the benefits of international trade in this case? Do they accrue only to the country that gets the industry?

Reference no: EM132332746

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