The reason why the most efficient firms in a Melitz industry make greater profits under free trade is due to the fact that they Operate under increasing marginal costs. Operate under FDI. Operate under low transport costs. Operate under increasing returns to scale.

The reason why the most efficient firms in a Melitz industry make greater profits under free trade is due to the fact that they Operate under increasing marginal costs. Operate under FDI. Operate under low transport costs. Operate under increasing returns to scale.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter14: Transaction Costs, Imperfect Information, And Behavioral Economics

Section: Chapter Questions

Problem 2QFR

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Question

The reason why the most efficient firms in a Melitz industry make greater profits under free trade is due to the fact that they

Operate under increasing marginal costs.
Operate under FDI.
Operate under low transport costs.
Operate under increasing returns to scale.

Explain your answer in up to 200 words and using a diagram

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The reason why the most efficient firms in a Melitz industry make greater profits under free trade is due to the fact that they Operate under increasing marginal costs. Operate under FDI. Operate under low transport costs. Operate under increasing returns to scale. Explain your answer and using a diagram
The reason why the most efficient firms in a Melitz industry make greater profits under free trade is due to the fact that they A. Operate under increasing marginal costs. B. Operate under FDI. C. Operate under low transport costs. D. Operate under increasing returns to scale. Explain your answer and support it using a diagram
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