The figure to the right shows an industry composed of a single monopolistic domestic firm. Initially, the firm sells its output exclusively in the domestic market. According to this figure, the profit-maximizing output level is units and the price is $. Now suppose that this domestic monopolist begins to sell in foreign markets as well, where it faces a perfectly elastic demand at $6.00. In the figure, using the line drawing tool, draw the demand curve this firm faces in its foreign markets. Label this line DF. Carefully follow the instructions above and only draw the required object. Now that this firm is operating in two segmented markets, the firm produces units of output and is accused of dumping because: O A. more output (4 units) is sold in foreign markets than at home (2 units). B. the foreign price of $6.00 is less than the domestic price of $8.00. 10.00- 9.00- 8.00- 7.00- 6.00- 5.00- 4.00- 3.00- 2.00- 1.00- 0.00+ 0 Cost, C and Price, P MRDOM MC DDOM 8 9 Quantities produced and demanded, Q 10 Q Q 5

The figure to the right shows an industry composed of a single monopolistic domestic firm. Initially, the firm sells its output exclusively in the domestic market. According to this figure, the profit-maximizing output level is units and the price is $. Now suppose that this domestic monopolist begins to sell in foreign markets as well, where it faces a perfectly elastic demand at $6.00. In the figure, using the line drawing tool, draw the demand curve this firm faces in its foreign markets. Label this line DF. Carefully follow the instructions above and only draw the required object. Now that this firm is operating in two segmented markets, the firm produces units of output and is accused of dumping because: O A. more output (4 units) is sold in foreign markets than at home (2 units). B. the foreign price of $6.00 is less than the domestic price of $8.00. 10.00- 9.00- 8.00- 7.00- 6.00- 5.00- 4.00- 3.00- 2.00- 1.00- 0.00+ 0 Cost, C and Price, P MRDOM MC DDOM 8 9 Quantities produced and demanded, Q 10 Q Q 5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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