1) In a monopolistic competition consumer always get a variety
of option because there are a number of small sellers selling
slightly differentiated goods. But economies of scale provide with
low cost which the consumer in the monopolistic competition doesn't
get. An increased return to scale will lead to a lower average
cost.
The correct answer to this question is "B" lower price.
2) "Specialization" trade based on economies of scale lead to
specialization.
3) With the same industry. Intra industry trade means exchange
if same products belonging to the same industry.
4) Monopolistic competition means a number of sellers selling
same but slightly differentiated goods. It all belongs to the same
industry for example cookie industry. there are a lot of cookie
seller with little differentiation in their cookie. An
international trade in the monopolistic competition will be an
intra industry.