Question 1 Suppose that the demand facing firms producing Golf clubs in Home and Foreign is given as follows. = S - The cost of producing Golf clubs is given by b) c) = TC(Qi)=F+C*Qi , Assume that the parameters for Home are as follows. SH = 1440, b = 2, F=5, C 1. Compute the equilibrium values of n, P, and Q. {Hint: either derive the expression for marginal revenue from the demand curve above or use the expression for marginal revenue from the text} --/ Assume that the parameters for Foreign are as follows. SF = 250, b = 2, F = 5, C=1. Compute the equilibrium values of n, P, and Q for Foreign Now suppose that Home and Foreign trade freely in Golf clubs. What are the equilibrium values of n, P, and Q in the integrated economy? Is trade welfare improving for consumers in both countries? Justify your answer.
Question 1 Suppose that the demand facing firms producing Golf clubs in Home and Foreign is given as follows. = S - The cost of producing Golf clubs is given by b) c) = TC(Qi)=F+C*Qi , Assume that the parameters for Home are as follows. SH = 1440, b = 2, F=5, C 1. Compute the equilibrium values of n, P, and Q. {Hint: either derive the expression for marginal revenue from the demand curve above or use the expression for marginal revenue from the text} --/ Assume that the parameters for Foreign are as follows. SF = 250, b = 2, F = 5, C=1. Compute the equilibrium values of n, P, and Q for Foreign Now suppose that Home and Foreign trade freely in Golf clubs. What are the equilibrium values of n, P, and Q in the integrated economy? Is trade welfare improving for consumers in both countries? Justify your answer.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Question 1
Suppose that the demand facing firms producing Golf clubs in Home and Foreign is given as
follows.
= S
-
The cost of producing Golf clubs is given by
b)
c)
=
TC(Qi)=F+C*Qi
, Assume that the parameters for Home are as follows. SH = 1440, b = 2, F=5, C
1. Compute the equilibrium values of n, P, and Q. {Hint: either derive the expression
for marginal revenue from the demand curve above or use the expression for marginal
revenue from the text}
--/
Assume that the parameters for Foreign are as follows. SF = 250, b = 2, F = 5,
C=1. Compute the equilibrium values of n, P, and Q for Foreign
Now suppose that Home and Foreign trade freely in Golf clubs. What are the
equilibrium values of n, P, and Q in the integrated economy? Is trade welfare improving
for consumers in both countries? Justify your answer.
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