Answer to Question #51766 in Economics for rini

Question

Note on economies of scale on international business.

Answer 1

Under economies of scale output growth of export of goods leads to lower average costs per unit of output in terms of other goods, which output requires the refusal. Economies of scale allow explaining the trade between countries in cases that can not be explained on the basis of classical theories of international trade. This primarily relates to trade between the countries, equally endowed with the basic factors of production, and to trade in technologically similar goods, intra-industry trade in differentiated products (eg, cars, products of electronic industry and others.).