Only typed answer The figure to the right shows curves representing the average cost ofhockey pucks produced in Canada (ACC) and the Slovak Republic (ACSR) aswell as the world demand (D) for hockey pucks.It is assumed that the world demand for pucks can be satisfied entirely by eithercountry.If, by historical accident, Canadian hockey puck producers are the first to beestablished, the figure suggests that Slovak puck producers willA. initiate a trade war with Canada.B. have the WTO install them as the world's hockey puck specialists.C. quickly supplant Canadian producers as the world's supplier ofhockey pucks.D. be unable to get their "foot in the door" since any new Slovak start-up firmwill have an average cost (Co) higher than the prevailing Canadian price(P₁).External Economies and SpecializationPrice, Cost (per puck)COOP1-Q1ACCACSRQuantity of pucks

The concept of external economies refers to the reduction in average costs of production for all…

The figure to the right shows curves representing the average cost of hockey pucks produced in Canada (ACC) and the Slovak Republic (ACSR) as well as the world demand (D) for hockey pucks. It is assumed that the world demand for pucks can be satisfied entirely by either country. If, by historical accident, Canadian hockey puck producers are the first to be established, the figure suggests that Slovak puck producers will OA. initiate a trade war with Canada. B. have the WTO install them as the world's hockey puck specialists. C. quickly supplant Canadian producers as the world's supplier of hockey pucks. O D. be unable to get their "foot in the door" since any new Slovak start-up firm will have an average cost (Co) higher than the prevailing Canadian price (P₁). External Economies and Specialization Price, Cost (per puck) CO P1+ 1 ACC ACSR Quantity of pucks