What happens if you increase, say there's one country that is exporting to all countries of the world, alright, its production may well be very large therefore, er, what benefits might that have? Economies of scale. Yes, economies of scale. Alright, so manufactured goods are a class of goods in which it's easy to differentiate the product, right. Very easy, because the goods are essentially differentiated alright. Although a car, if you think of a car being a car, we know as consumers that one car is not exactly the same as another car, very easy to put power steering on the car or to put go faster stripes on a car, you can differentiate the product very, very easily, alright. As a result, and because consumers like variety, it's likely that they'll want to er, consume different types of what, what is essentially the same, the same good. Compounding that influence is the fact that economies of scale in manufacturing production, alright, are non-trivial.
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