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International trade can have big effects on domestic markets

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International trade can have big effects on domestic markets. For both an import good and an export good (in other words, address each bulleted item below twice-once for import and once for export), describe how opening up to international trade affects the following:

Supply or demand for the particular good,

The competitiveness of that good's market, and

How the change in competitiveness affects equilibrium price and quantity.

Stepping away from the import/export examples, describe how opening up to trade specifically affects a domestic monopoly. Include an explanation, using game theory, of how even a single additional competitor can lead to a market outcome similar to perfect competition.

Reference no: EM132890515

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