By reducing the volume of trade transportation costs tend to ?
Correct answer: A. stop the process of product price equalization and factor price equalization before they are complete:
- A. stop the process of product price equalization and factor price equalization before they are complete:
- B. ensure that the process of product price equalization and factor price equalization are complete
- C. eliminate all of the feasible gains from international trade
- D. maximize all of the feasible gains from international trade
Explanation
Transportation costs keep the prices of traded goods from becoming fully equal across countries. Because complete product-price equalization is prevented, complete factor-price equalization is also prevented.
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