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INCREASING RETURNS GEOGRAPHY

What is increasing returns?
Increasing returns are the tendency for that which is ahead to get further ahead and for that which is losing advantage to lose further advantage.
If a product gets ahead, increasing returns can magnify the advantage, and the product can go on to lock in the market.
Why is increasing returns to owners important?
Increasing returns to owners is important because a company's shareholders are who the company is making money for.
Shareholders always want higher returns and it is important to appease the shareholders if Coca-Cola wants to continue being a successful publicly traded company.
What is a dynamic increasing return?
Dynamic increasing returns to scale exist if average costs fall as cumulative output over time rises.
Dynamic increasing returns to scale could arise if the cost of production depends on the accumulation of knowledge and experience, which depend on the production process over time.
Answer and Explanation:
(a) Under monopolistic competition, increasing returns to scale (RTS) leads to gain from trade.
This is so because to take the advantage of large-scale production, similar nations will specialize in different commodities and thereby leading to trade.

This paper develops a simple model that shows how a country can endogenously become differentiated into an industrialized "core".Autres questions

What is increasing returns?