According to the new trade theory, how does trade offer an opportunity

QUESTION

According to the new trade theory, how does trade offer an opportunity for mutual gain when countries do not differ in their resource endowments or technology?

A. Trade results in a contraction of the size of the markets of individual firms.

B. Trade allows for production of products at higher prices.

C. Trade increases the variety of goods available to consumers and lowers the costs of those goods.

D. Trade allows countries to attain self-sufficiency in the production of all goods.

E. Trade guarantees first-mover advantages to all the countries that engage in trade.

ANSWER

C