With Increasing Returns (Falling Average Costs), International Trade Will Cause

question 6

Multiple Choice

With increasing returns (falling average costs) , international trade will cause the demand curves of monopolistically competitive firms to become _______________ because of foreign competition and firms must _______________to meet foreign competition.

• A) steeper; raise prices
• B) flatter; lower prices
• C) flatter; raise prices
• D) steeper; lower prices