12.00- 11.00- Cost, C and Price, P 10.00- 3 9.50 --- 9.00 8.67 8.00- 7.00 7.00- 6.29 6.00- 5.33 5.00- 4.00- 3.00- 2.00- 2 1.00- 0.00+ 0.00 2.00 4.00 1 MRDOM 6.00 MC D FOR MR 8.00 D DOM Quantities produced and demanded, Q 10 Question 2: The figure above shows an industry composed of a single monopolistic domestic firm. The firm sells in two, segmented markets: 1) a domestic market where it faces the demand curve DDOM; 2) an export market, where it faces the demand curve DFOR. 1) 2) What is the profit maximizing price of this firm in the domestic market if it did not have the option of exporting? Now suppose the firm can export as well. What price will it charge in the domestic market? What price will charge in the export market? Will the firm's pricing be deemed as dumping?
12.00- 11.00- Cost, C and Price, P 10.00- 3 9.50 --- 9.00 8.67 8.00- 7.00 7.00- 6.29 6.00- 5.33 5.00- 4.00- 3.00- 2.00- 2 1.00- 0.00+ 0.00 2.00 4.00 1 MRDOM 6.00 MC D FOR MR 8.00 D DOM Quantities produced and demanded, Q 10 Question 2: The figure above shows an industry composed of a single monopolistic domestic firm. The firm sells in two, segmented markets: 1) a domestic market where it faces the demand curve DDOM; 2) an export market, where it faces the demand curve DFOR. 1) 2) What is the profit maximizing price of this firm in the domestic market if it did not have the option of exporting? Now suppose the firm can export as well. What price will it charge in the domestic market? What price will charge in the export market? Will the firm's pricing be deemed as dumping?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:12.00-
11.00-
Cost, C and Price, P
10.00-
3
9.50
---
9.00 8.67
8.00-
7.00
7.00-
6.29
6.00-
5.33
5.00-
4.00-
3.00-
2.00-
2
1.00-
0.00+
0.00
2.00
4.00
1
MRDOM
6.00
MC
D FOR MR
8.00
D DOM
Quantities produced and demanded, Q
10
Question 2:
The figure above shows an industry composed of a single monopolistic
domestic firm. The firm sells in two, segmented markets: 1) a domestic market where it faces the
demand curve DDOM; 2) an export market, where it faces the demand curve DFOR.
1)
2)
What is the profit maximizing price of this firm in the domestic market if it did
not have the option of exporting?
Now suppose the firm can export as well. What price will it charge in the
domestic market? What price will charge in the export market? Will the firm's pricing
be deemed as dumping?
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