If some industries exhibit internal increasing returns to scale in each country,we should not expect to see
A)high levels of specialization in both countries.
B)increased productivity in both countries.
C)inter- industry trade between countries.
D)intra- industry trade between countries.
E)perfect competition in these industries.

Question

Quizplus · Accepted Answer

Internal increasing returns to scale often lead to imperfect competition because firms can lower their average costs by increasing production, which can result in fewer firms dominating the market.

If Some Industries Exhibit Internal Increasing Returns to Scale in Each