Exercise 4.2Consider the response of firms in a world with two identical countries (Home and Foreign). Assume that a firm must incur an additional cost t for each unit of output that it sells to customers across the border.Consider the decisions of firms 1 and 2 (with marginal costs c, and c₂) in the figures below.Firm 2 can profitably operateA. in both the domestic and the export markets.Click in calart unir anewer and then click t-ewarCost, C and Price. PDomestic (Home) MarketQuantityFirm 2 can profitably operateA. in both the domestic and the export markets.O B. in the export market only.OC. in neither the domestic nor the export markets.OD. in its domestic market only.MC₂MC₁DCo:8 cC₂2Export (Foreign) Market09QuantityQuantityMC₂-MC,DQMC1D8C₁1Quantity

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Exercise 4.2 Consider the response of firms in a world with two identical countries (Home and Foreign). Assume that a firm must incur an additional cost t for each unit of output that it sells to customers across the border. Consider the decisions of firms 1 and 2 (with marginal costs c, and c₂) in the figures below. Firm 2 can profitably operate A. in both the domestic and the export markets. Click to calart unir anewer and then click t ewar Cost. C and Price. P Domestic (Home) Market Quantity Firm 2 can profitably operate A. in both the domestic and the export markets. OB. in the export market only. OC. in neither the domestic nor the export markets. OD. in its domestic market only. MC₂ MC₁ D Co: Export (Foreign) Market 8 c c₂} 2 09 +1 Quantity Quantity MC₂ - MC₁ D Q MC₁ D 8C₁1 Quantity

Exercise 4.2 Consider the response of firms in a world with two identical countries (Home and Foreign). Assume that a firm must incur an additional cost t for each unit of output that it sells to customers across the border. Consider the decisions of firms 1 and 2 (with marginal costs c, and c₂) in the figures below. Firm 2 can profitably operate A. in both the domestic and the export markets. Click to calart unir anewer and then click t ewar Cost. C and Price. P Domestic (Home) Market Quantity Firm 2 can profitably operate A. in both the domestic and the export markets. OB. in the export market only. OC. in neither the domestic nor the export markets. OD. in its domestic market only. MC₂ MC₁ D Co: Export (Foreign) Market 8 c c₂} 2 09 +1 Quantity Quantity MC₂ - MC₁ D Q MC₁ D 8C₁1 Quantity

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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