| Sumario: | The writers examine and analyze the inefficient trade equilibria that can be introduced by scale economies despite the workings of the market mechanism. In a world of scale economies, market forces cannot be relied upon always to yield an efficient equilibrium. There is a wide range of states of efficiency, in the classical sense, that are possible for the many equilibria that exist under economies of scale and for similar production relationships. Moreover, equilibria need not be efficient, and even efficient equilibria need not satisfy comparative advantage. Two new concepts, local efficiency and quantitative degree of inefficiency, seem to function more uniformly than the standard concept in the economies of scale setting.
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