Explain how if at all would your answer change

Reference no: EM1338805

Monopoly business

ABC is monopoly seller of aluminum in the U.S. and sells no aluminum on the world market. It sells aluminum domestically for $2500 per tom and its average cost is $2200 per ton. The world price is $2000 per ton. (High tariffs prevent foreign firms from exporting into the U.S.)

True or False: "Obviously, ABC should not sell any aluminum on the world market." (Assume if it did it would have effect on the world price- the world market is perfectly competitive.) How if at all would your answer change if you know that ABC's technology had decreasing returns to scale? Explain.

Reference no: EM1338805

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