What quantity will each firm sell domestically

Assignment Help Business Economics

Reference no: EM13156255

Consider two countries: USA and Canada. Both countries have the same market demand for tomatoes: P = 200 - 2Q. In each country there is a single monopolistic firm that produces tomatoes and the firm's marginal cost is MC = 20. If a firm ships the tomatoes across the border
the transportation cost is T = 10.

i.) Find the equilibrium price and quantity traded in autarky in USA

ii.) Suppose each monopolist is allowed to sell both domestically and export the good. At what price will the good be traded? What quantity will each firm sell domestically and what quantity will it export?

iii.) What is the gain in consumer surplus (comparing to autarky) if trade is allowed?

What are firms' profits in autarky and in free trade

Reference no: EM13156255

Questions Cloud

Accepting of the view of global warming : What are some reasons why society, especially in the U.S., has been more and more accepting of the view of global warming? Please post to these questions by the end of Week 3.

Impact on american business : what will be the impact on American business, in terms of how businesses create value by integrating the production and distribution of goods, services, and information?

Increasing myosin-atpase activity affects muscle contracact : Explain why warm-up exercises increase myosin-ATPase activity. Describe how increasing myosin-ATPase activity affects muscle contraction.

Dividends-received deduction : One year Potter, Inc. had gross income from sales of $210,000, business expenses of $230,000, and dividend income from U.S. corporations of $150,000. Potter's 80 percent dividends-received deduction was:

What quantity will each firm sell domestically : Suppose each monopolist is allowed to sell both domestically and export the good. At what price will the good be traded? What quantity will each firm sell domestically and what quantity will it export?

Transferred inventory to a corporation : Evan Erman transferred inventory to a corporation in a Code Sec. 351 transaction. His basis in the inventory was $10,000 and its value was $8,000. If he received $2,000 in cash and 100 shares of stock, the resulting bases are:

Explain acetic acid to the phenolphthalein end point : A volume of 20.22 mL of NaOH solution which is (0.046464) was needed to titrate 10.06mL of acetic acid to the phenolphthalein end point.

How will it influence the deficit during next two decades : How did the Social Security system influence the size of budget deficit during 1985-2010? How will it influence the deficit during the next two decades? Why or why not?

What techniques of gene-finding can be used : Some exons in the human genome are quite small (less than 75 bp long). Identification of such "micro-exons" is difficult because these distances are too short to reliably use open reading frame identification of codon bias to determine if small ge..

User Account

All Pages