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Q3. Give a discussion from the economies of scale perspective on the statement trade need not be the result of comparative advantage. And derive the
Q3. Give a discussion from the economies of scale perspective on the statement "trade need not be the result of comparative advantage". And derive the relationship between the number of firms (n) and the price each firm charges (P) for the model of monopolistic competition. [Hint: P = c + 1/ (b * n); c is the marginal cost; b is a positive constant term representing the responsiveness of a firm's sales to its prices]
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