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Consider the monopolistically competitive with increasing returns to scale model of intradindustry trade. Home and Foreign have the same number of firms in the monopolistically competitive industry and the same number of consumers. (a) Why is imperfect competition important for intraindustry trade to occur? (b) Why is increasing returns to scale important for intraindustry trade to occur? (c) Consider the long-run equilibrium with trade between Home and Foreign. Suppose that growth in both countries doubles the number of firms and the number of consumers in the Home and Foreign countries. Explain the effects of this change on an individual firm in the Home country in the short run! (d) Explain why the short-run cost of intraindustry trade is that the total number of firms declines with trade! (e) Describe two long run gains from trade that occur with intraindustry trade