1) What is internal economies of scale? And why would it be a source of trade? What are the gains of trade in the presence of internal economies of scale?

2) Using graph please explain how performance differences in an industry with internal economies of scale creates winners and losers after trade? Explain step by step.

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Internal economies of scale refer to cost advantages that a firm can achieve as it increases its scale of production These cost advantages arise from factors such as specialization division of labor i... View the full answer