L08Sep09.306

L08Sep09.306 - FRE 306 Reading: Alex McCalla/Tim Josling,...

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FRE 306 Reading: Alex McCalla/Tim Josling, Agricultural Policies and World Markets , Macmillan, 1985, Ch. 2
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Impact of Trade on Supply and  Demand Curves: Exporter, Importer Exporter : Importer: Red line: effective D curve Yellow line: effective S curve Exporter: Supply curve unaffected by trade; demand curve is normal until world P reached, then demand becomes elastic at world price Importer: Demand curve unaffected by trade; Supply curve is normal until world P reached, then supply becomes elastic at world price *Note Pw is flat line. This means exporter, importer cannot affect world P Lec 8: Market Power in World Markets 2 Pw Pw
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Food Market Dynamics with Market  Power in World Market 1 Alex McCalla/Tim Josling, Agricultural Policies and World Markets , Macmillan, 1985, Ch. 2 2-country model of world, one exporter, importer Both have market power (monopoly, monopsony) Both countries produce and consume the product One country (A) is low cost, other country (B) high cost Excess demand derived from the importing country (B) Excess supply derived from the exporting country (A) Excess supply is amt that low-cost country exports at
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L08Sep09.306 - FRE 306 Reading: Alex McCalla/Tim Josling,...

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