A competitive industry with an upward-sloping supply curve sells Qh of its product in its home country and Qf in a foreign country, so the total quantity it sells is Q = Qh + Qf . No one else produces this product. There is no shipping cost. Determine the equilibrium price and quantity in each country.

Now the foreign government imposes a binding quota, Q (6 Qf at the original price). What happens to prices and quantities in both the home and the foreign market?