For decades, there have been just two producers of large commercial aircraft, Boeing and Airbus. Which statement best explains how new trade theory views this situation from a manufacturing perspective?

Multiple Choice

The size of the investment needed to support the production of large commercial aircraft is only available in large developed countries.

Location advantages favor Airbus for sales, but Boeing for design.

The lack of trade barriers within the European Union makes it easy for individual airlines to purchase tariff$-$free aircraft.

The economies of scale required to be a profitable manufacturer effectively limit the size of the global market.

Because Airbus is based in the European Union there is no incentive for individual European countries to establish their own aircraft production.