If a firm located in a country charges high prices on its exports and earns profits on its export sales, then:

Question 3 options:

a.the profit earned by the firm is not considered as a part of the exporting country's GDP.

b.the firm emerges as a natural monopolist in the long-run.

c.the high export price enhances the exporting country's terms of trade.

d.the majority of the gains from international trade accrue to the foreign buyers.