Declining costs per unit of output results from international trade especially if ?
Correct answer: D. Economies of scale exist for producers
- A. International trade affords producers monopoly power
- B. National governments levy imports tariffs and quotas
- C. Producing goods entails increasing costs
- D. Economies of scale exist for producers
Explanation
Declining average cost per unit reflects economies of scale, where larger-scale production lowers unit costs. Monopoly power and trade barriers do not themselves guarantee lower production costs.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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