ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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The demand for home firm product is given by the inverse demand function: P = 120 −QD. The company’s costs are: T C = 20Q+ 200 and MC = $20.
2. Suppose the home country open up to free trade and a foreign competitor enters the market. Assume that
the foreign firm has the same cost structure as the home firm (the
A) Derive the best response function for each firm (h-home and f-foreign)
B) Find each firms’ output, the home market price, and each firms’ profit from the home market
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