What impact would the threat of imports have on monopolist

Reference no: EM131917821

Problem

1. You read in a newspaper that the owners of capital in a particular country are urging their government to restrict trade through import quotas. What might you infer about the relative factor abundance in that country? Why?

2. It has been argued that opening a country to international trade is a great "antitrust" policy. What impact would the threat of imports have on a monopolist who had never before been faced with foreign competition? How would the monopolist respond concerning the quantity produced and the price charged in the domestic market?

Reference no: EM131917821

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