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Unformatted text preview: 1 , where p 1 and Q 1 are price and total output sold in country 1 respectively. p 2 = 100 - Q 2 , where p 2 and Q 2 are price and total output sold in country 2 respectively. J = 5 1) Calculate the profit maximizing levels of output at home and abroad for each firm. Calculate the market price in each country and total profits for each firm. 2) Are firms dumping their product in the foreign countrys market? Justify. (II) Suppose now countries do not trade with each other (i.e. they are in autarky) so a single firm operates in each country as a monopolist. (1) Calculate quantities sold in each country and market price. (2) Compare World Welfare under autarky and free trade....
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- Fall '09