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In: Economics

2. (8 marks) In a model of dynamic increasing returns, illustrate an alternate scenario to what...

2. In a model of dynamic increasing returns, illustrate an alternate scenario to what we discussed in class and briefly explain using words. In this scenario, France protects its cotton industry with a temporary blockade, but after the blockade ends the protection is not enough for France to retain an advantage in cotton production, and once UK cotton is no longer blockaded, that the UK will recover its initial advantage. Be sure to draw and label any necessary learning curves (UK and France), and any relevant points on the curves.

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