hw5 - Econ 4550/6550 International Trade Assignment 5 Due...

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1 Econ 4550/6550 International Trade Assignment 5 Due on: Friday, October 23 Your answers must be typed. Graphs may be drawn by hand, if necessary. Please make a copy of your work before you submit it, since this assignment will not be returned before the second midterm exam. 1. Answer the following questions, using the figure below: (i) The figure above represents the demand and cost functions facing a Brazilian Steel producing monopolist. If it were unable to export, and was constrained by its domestic market, what quantity would it sell at what price? (ii) Now the monopolist discovers that it can export as much as it likes of its steel at the world price of $5/ton. How much steel will the monopolist sell, and at what price? (iii) Given the opportunity to sell at world prices, what is the marginal (opportunity) cost of selling a ton domestically? (iv) How much steel would the firm sell domestically, and at what price? (v) Is the Brazilian firm engaged in dumping? Is this predatory behavior on the part of the Brazilian steel
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