One critical characteristic of monopolistic competition is that

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Intra industry trade dominates trade flows if countries are similar in factors of production so trade is not due to to differences in cost of production. Rather it is due to the existence of differentiated products.....When there is monopolistic competition. Trade leads to an aincrease in the number of firms since each firm produces a slightly different product the increase in the number of firms leads to an increase in the number of products available in the market.. Why is PP negative slope=more firms give rise to more intense competition and hence a lower price

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