Question
1. In our heterogeneous-firm model, which types of firms benefit from trade and which firms lose.Explain why. 2. Consider Krugman's model of monopolistic competition, where
1. In our heterogeneous-firm model, which types of firms benefit from trade and which firms lose.Explain why.
2. Consider Krugman's model of monopolistic competition, where all firms are identical.When the differentiated products ("varieties") are freely traded, are some of them produced by both countries?Based on your answer, what is one source of the welfare gains from free trade?
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The Economics of Public Issues
Authors: Roger LeRoy Miller, Daniel K. Benjamin, Douglass C. North
19th edition
134018974, 134018973, 9780134020532 , 978-0134018973
