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Lqwhuqdwlrqdo Gxrsro/ DQG Uhflsurfdo GXPSLQJ: HFRQRPLFV Ri Hxurshdq Lqwhjudwlrq/ Pdulxv Eu Okduw

This document discusses international trade and dumping between two identical countries (Country H and Country F) that each have a monopoly firm producing a homogeneous good. It first presents the demand and cost functions for each country's monopoly firm when operating independently. It then analyzes the outcome under free trade, finding the monopoly markup is lower. Even with trade barriers removed, dumping can occur if export costs remain. Specifically, the foreign firm may set export prices below domestic prices to gain market share in the other country if its perceived profit from exports is higher than its costs. This can lead to intra-industry trade or "reciprocal dumping".

Uploaded by

Qamar Ali
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We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
55 views3 pages

Lqwhuqdwlrqdo Gxrsro/ DQG Uhflsurfdo GXPSLQJ: HFRQRPLFV Ri Hxurshdq Lqwhjudwlrq/ Pdulxv Eu Okduw

This document discusses international trade and dumping between two identical countries (Country H and Country F) that each have a monopoly firm producing a homogeneous good. It first presents the demand and cost functions for each country's monopoly firm when operating independently. It then analyzes the outcome under free trade, finding the monopoly markup is lower. Even with trade barriers removed, dumping can occur if export costs remain. Specifically, the foreign firm may set export prices below domestic prices to gain market share in the other country if its perceived profit from exports is higher than its costs. This can lead to intra-industry trade or "reciprocal dumping".

Uploaded by

Qamar Ali
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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