The larger the number of firms in a monopolistic competition situation

This is possible because a noncompetitive market favours the company to the detriment of the consumer. The traitsof amonopoly atomic number 18 high harm levels, supply constraints, or inordinate barriers to entry.This type of market would be comprised of peerless supplying firm and consumers would have no choice nevertheless to purchase solely from this firm.2. The larger the number of firms in a monopolistic competition situation, the larger are that sylvans exportations. This is incorrect as in monopolistic trade there is only one firm and the monopoly firms demand curve is identical to the market demand curve, and the monopoly firm deficiency not consider what its competitors are pricing at. The moment another firm enters the trade it is no longer a monopoly.3. Two countries engaged in trade in products with no scale economies, produced infra conditions of perfect competition, are likely to be engaged in intra-industry trade.This is possible as any country which can find comparable goods at a better price pull up stakes take to substance of that product. However, generally these are influenced by technological and or human factors. International trade generally takes into bet cost and utility, in determining trade.4. History and accident determine the details of trade involving scale economies.This is delusive as what determines scale of economies is cost advantages that a business obtains due to expansion. Economies of scale are utilized by any firm expanding its scale of operation. These are not by accident and are planned. However, historical reasons may play a part in trade between two countries and the scale of economies, but up to now this has decreased with modern trade practices.5. Intra-industry trade will tend to dominate trade flows when the following exists prominent differences between relative country factor availabilities.This is true as trade takes place to fulfill one reason demand. When there is a large difference between two countries on availability and/or price, it naturally spurs demand, and depending on the factors available, Intra industry trade will develop. The rising share of intra-industry trade may produce due to increase of technological transactions and also due to expansion of the intra-firm network through contradictory direct investment.6. A tariff always drives a wedge between foreign and domestic prices, peak the domestic price but by less than the tariff rate.True, because when a country implements a tariff, it will create an increase in the price of the goods on the domestic market, and a decrease in price in the rest of the world.7. If we add together the gains and losses from a tariff, we find the net effect on national eudaemonia can be separated into three parts.This is true as the aggregate welfare effect for the country is found by summing the gains and losses to consumers, producers and the government. The net effect consists of three components (1) positive term of tr ade effect (2) a negative production distortion and(3) a negative consumption distortion.8. An export subsidy causes the same losses as a tariff.The welfare effects of a tariff and an export subsidy are quite different in a competitive market. The subsidy raises the internal prices at home, while lowering the price abroad.The difference between a tariff and an export subsidy is that power improves the terms of trade while the latter worsens them. The extent of loss or gain will spay on factors employed.