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Question: In addition to the positive welfare effects that free trade has on an economy, there are a variet...

Show transcribed image text In addition to the positive welfare effects that free trade has on an economy, there are a variety of other benefits of international trade. Consider the following scenario: Without free trade, Rooby has market power as a local producer. Once free trade is implemented In the local economy, Rooby is no longer able to raise its prices above competitive levels. The previous scenario represents which of the following benefits of free trade? Lower costs through economies of scale Increased variety of goods Increased competition An enhanced flow of ideas

In addition to the positive welfare effects that free trade has on an economy, there are a variety of other benefits of international trade. Consider the following scenario: Without free trade, Rooby has market power as a local producer. Once free trade is implemented In the local economy, Rooby is no longer able to raise its prices above competitive levels. The previous scenario represents which of the following benefits of free trade? Lower costs through economies of scale Increased variety of goods Increased competition An enhanced flow of ideas