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EXTERNAL ECONOMIES

EXTERNAL ECONOMIES. Specialized suppliers, labor market pooling, knowledge spillovers. D. Specialization and Trade. C 0. P 1. ACargentine. ACisrael. Quantity. D. If Argentine product gets established first, it may be able to sell belowthe cost that an individual

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EXTERNAL ECONOMIES

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  1. EXTERNAL ECONOMIES Specialized suppliers, labor market pooling, knowledge spillovers

  2. D Specialization and Trade C0 P1 ACargentine ACisrael Quantity D If Argentine product gets established first, it may be able to sell belowthe cost that an individual Israeli firm faces, C0 .

  3. D Losses from Trade C0 1 P1 ACargentine 2 ACisrael P2 Quantity D If Israel were to block all trade, it will gain from the fall in price from P1 to P2

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