A positive, dynamic effect of economic integration is illustrated by ?
Correct answer: D. economy-of-scale effect
- A. trade diversion effect
- B. increased monopoly power of firms
- C. decrease customs costs
- D. economy-of-scale effect
Explanation
Economic integration can enlarge the market, allowing firms to produce at a lower average cost through economies of scale. Trade diversion and increased monopoly power are not positive dynamic effects for the integrated economy.
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