Consider the following statements in the context of the New Trade Theory:
(i) It explains why countries trade in similar goods.
(ii) It assumes free trade.
(iii) It assumes that trade takes place in monopolistic conditions.
(iv) It exploits the economies of scale in production.
Which of the above statements are correct?
Choose the correct answer from the code given below :
1
(i), (iii) and (iv)
2
(ii) and (iv)
3
(i) and (iii)
4
(i) and (ii)