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countries, Home and Foreign, whose is SH = 900.000 and SF = 1.600.000. d curve of the industry i is n- 30000 (Pi – P-) | al cost function is CT = 750,000,000 + Derive the equilbrium price in the long number of varieties in the long run at at Foreign in AUTARKY. (b) Derive the price in the long run and the number of the long run at Home and at Foreign in E. (c) Compare (a) y (b) and show that ries are better off with free trade.

countries, Home and Foreign, whose is SH = 900.000 and SF = 1.600.000. d curve of the industry i is n- 30000 (Pi – P-) | al cost function is CT = 750,000,000 + Derive the equilbrium price in the long number of varieties in the long run at at Foreign in AUTARKY. (b) Derive the price in the long run and the number of the long run at Home and at Foreign in E. (c) Compare (a) y (b) and show that ries are better off with free trade.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter11: Price And Output Determination: Monopoly And Dominant Firms
Section: Chapter Questions
Problem 3E
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Consider 2 countries, Home and Foreign, whose market size is SH = 900.000 and SF = 1.600.000. The demand curve of the industry i is Qi = S (1 /n- 30000 (Pi – P-) And the total cost function is CT = 750,000,000 + 5,000Q(a) Derive the equilbrium price in the long run and the number of varieties in the long run at Home and at Foreign in AUTARKY. (b) Derive the equilbrium price in the long run and the number of varieties in the long run at Home and at Foreign in FREE TRADE. (c) Compare (a) y (b) and show that both countries are better off with free trade.
Transcribed Image Text:Consider 2 countries, Home and Foreign, whose market size is SH = 900.000 and SF = 1.600.000. The demand curve of the industry i is Qi = S (1 /n- 30000 (Pi – P-) And the total cost function is CT = 750,000,000 + 5,000Q(a) Derive the equilbrium price in the long run and the number of varieties in the long run at Home and at Foreign in AUTARKY. (b) Derive the equilbrium price in the long run and the number of varieties in the long run at Home and at Foreign in FREE TRADE. (c) Compare (a) y (b) and show that both countries are better off with free trade.
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