Question 2 Suppose that a Chinese solar panel manufacturer has an upward sloping marginal cost function given by MC = 10 Q where Q is the total number of solar panels produced by this firm. Denote the number of panels sold in the Chinese market by QH and the number of panels sold in the US market by QF. The firm faces a downward sloping demand curve in the Chinese market given by PH = 750-5 QH. It faces a horizontal demand curve in the US market at a price of 500. That is, it can sell any number of panels in the US market at that price. a) b) c) d) market? How many panels will the firm sell in each market? What is the profit maximizing price of the panels it charges in the Chinese Is the price in the Chinese market higher or lower than in the US market? Will this qualify as dumping? ) Show the results diagrammatically.
Question 2 Suppose that a Chinese solar panel manufacturer has an upward sloping marginal cost function given by MC = 10 Q where Q is the total number of solar panels produced by this firm. Denote the number of panels sold in the Chinese market by QH and the number of panels sold in the US market by QF. The firm faces a downward sloping demand curve in the Chinese market given by PH = 750-5 QH. It faces a horizontal demand curve in the US market at a price of 500. That is, it can sell any number of panels in the US market at that price. a) b) c) d) market? How many panels will the firm sell in each market? What is the profit maximizing price of the panels it charges in the Chinese Is the price in the Chinese market higher or lower than in the US market? Will this qualify as dumping? ) Show the results diagrammatically.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:Question 2
Suppose that a Chinese solar panel manufacturer has an upward sloping marginal cost function
given by MC = 10 Q where Q is the total number of solar panels produced by this firm. Denote
the number of panels sold in the Chinese market by QH and the number of panels sold in the US
market by QF. The firm faces a downward sloping demand curve in the Chinese market given by
PH = 750-5 QH. It faces a horizontal demand curve in the US market at a price of 500. That is, it
can sell any number of panels in the US market at that price.
a)
b)
c)
d)
market?
How many panels will the firm sell in each market?
What is the profit maximizing price of the panels it charges in the Chinese
Is the price in the Chinese market higher or lower than in the US market? Will
this qualify as dumping?
) Show the results diagrammatically.
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