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External economies of scale and dynamic increasing returns

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Reference no: EM131311407

Answer the following questions:

Part 1: Give one example of products or industries that has external economies of scale and dynamic increasing returns. Explain why?

Part 2: Recently, we have observed that wage in China has been increasing. What would you think to happen to external economy industries currently located in China? Will these industries move to foreign countries with lower wage? Why or why not? Please use the theories discussed in this module  to explain your answer.

Reference no: EM131311407

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