Consider the following statements: I. With larger markets, c…
Consider the following statements: I. With larger markets, consumers have access to larger variety of goods; consumers like variety. II. When countries specialize in the industries in which they have comparative advantage, they both gain. III. When there are economies of scale, firms’ costs decrease with larger scales of production. Which combination of the statements above best describes the causes for the gains from trade in a monopolistic competition model with two identical countries?
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