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Economies of scale based intra-industry trade models are primarily drive by ______.

1 Answer

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Answer: Intra-industry trade

Step-by-step explanation:

exchange of similar products belonging to the same industry. when the same types of goods are both imported and exported. Gains from intra-industry trade reflect economies of scale.

Intra-industry trade is less controversial than trade based on differences.

Krugman and Helman's theory of intra-industry trade → each country specializes in one product moving further down the cost curve and then trade with the other.

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