Imagine scale economies were not only external to firms, but were also external
ID: 1167208 • Letter: I
Question
Imagine scale economies were not only external to firms, but were also external to individual countries. That is, the larger the worldwide industry (regardless of where firms or plants are located), the cheaper would be the per- unit cost of production. Describe what world trade would look like in this case.Please more details! Thanks! Imagine scale economies were not only external to firms, but were also external to individual countries. That is, the larger the worldwide industry (regardless of where firms or plants are located), the cheaper would be the per- unit cost of production. Describe what world trade would look like in this case.
Please more details! Thanks!
Please more details! Thanks!
Explanation / Answer
If scale economies were not only external to firms, but were also external to individual countries , apparently every country will be specializing in some elements of the final product. This will create a very high level or volume of intra industry trade.