What is the expected outcome when trade occurs in a
Monopolistically competitive industry if the nations have similar
Tastes, technology, products, and costs?
A)No trade is possible.
B)Consumers are left with no choices.
C)Each firm has a larger market in which to sell, and consumers have more choices of sellers and products.
D)Transportation costs become the driving factor.

Question

Quizplus · Accepted Answer

When trade occurs in a monopolistically competitive industry where nations have similar tastes, technology, products, and costs, each firm has a larger market in which to sell and consumers have more choices of sellers and products. This is because trade allows for a larger market and competition, which leads to innovation and variety in the products and services available to consumers. No other option is the expected outcome of trade in a monopolistically competitive industry with similar nations.

What Is the Expected Outcome When Trade Occurs in a