Recall the discussion in Section 4.7, part (ii), of trade in which Fujifilm has a cost advantage.

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Recall the discussion in Section 4.7, part (ii), of trade in which Fujifilm has a cost advantage. Draw a diagram showing the effect of trade on U.S. consumer surplus, Kodak profit, and U.S. social welfare in this case. Interpret the welfare effect in terms of a competition effect, which is beneficial, and a rent-transfer effect, which is a loss for the United States. Mark these two effects clearly on the diagram.
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