Question

According to new trade theory, trade, through its impact on economies of scale, is most likely to reduce the volume of the goods produced. decrease the variety of goods available to consumers. decrease the average costs of goods. inhibit first-mover advantages in all industries. benefit only nations that differ in resource endowments or technology.

Answer 1

Option C (Decrease of the average cost of goods) seems to be the right response to the key statement.

Step-by-step explanation:

• NTT seems to be a compilation of business theories for world commerce, considering the role of size distribution rates of return as well as efficiency gains or effects on the network.
• And as per this theory, in addition to its effect on the economy of scale, trade or exchange is much more probable to reduce the total amount of goods and services.

Other possibilities aren't related to something like the scenario in question. So option C seems to be the perfect solution.