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After a trade agreement, what increases is "entry", which means "access". Firms from both Canada and the US, each have access to buyers in both countries. From each country's perspective there are new entrants coming in, but the total number of operating firms, in Canada and the US can be larger, smaller, or stay the same. What happens after the trade agreement is a couple of things: each operating firm faces greater competition from others, and each operating firm has access to potentially more demanders of their product. This pair of things is represented as a counterclockwise rotation of the demand curve. There need not be a shift, just a rotation. This rotation necessarily two effects. The first effect is that the upper part of the demand curve presses down. This represents competition. Competition erodes profits and forces suppliers to innovate, which means to shift their marginal cost curve down. Price is also driven down. This will force the firms who have too high marginal cost curves andare unable to innovate out of that sector. (Some firms exit the sector, or die, and the peole who make them up disperse and reorganize in other firms, perhaps in a different sector.) The second effect is that the lower part of the curve moves up. This represents the increase in access to new potential demanders. This is the elasticity. An increase in elasticity means that each decrease in price now attracts more demanders, and so, it increases the quantity demanded more than it did before.

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