Question

In the model of monopolistic competition, trade costs between countries cause A) marginal costs of exported goods to exceed the marginal costs of goods sold domestically. B) all firms that can earn a profit on domestic sales to export their goods at higher prices. C) countries to negotiate the elimination of trade costs by mutual subsidization of trade. D) marginal costs of goods sold domestically to exceed the marginal costs of exported goods. E) all firms that can earn a profit on domestic sales to export their goods at lower prices.

Answer 1

Answer:

A) marginal costs of exported goods to exceed the marginal costs of goods sold domestically.

Explanation:

In the case when there is the monopolistic competition so the trade cost that lies between the countries could result in the marginal cost with respect to the goods that are exported should be more than the marginal cost of the goods that sold domestically

So as per the given situation, the option a is correct