1 Intraindustry Trade Consider car makers that operate under monopolistic competition in symmetric equilibrium. Each monopolistic car maker produces with a total cost function TC = F +c.Qc, where F = 500,000 and c= 100. . What are the average and marginal cost functions of a car maker? Each of n car makers faces residual demand of QC=S. [1 b. (Pc Pc)], = - where S = 50,000, b= 1/1,000 and Pc is average equilibrium price. What are marginal revenues? (Hint: You may use the formula in the textbook. Otherwise, reformulate demand so that PM = PM(QM) and derive total revenue; differentiate total revenue with respect to quantity.] Graph the average-cost-variety (CC) and the price-variety (PP) schedules for this industry in a diagram that shows price, average cost and the number of firms (varieties). Find the number of firms (varieties in this industry in the absence of trade. What is price in a symmetric autarky equilibrium? Cars can be traded across countries at not cost. Using the average-cost- variety (CC) and the price-variety (PP) schedules above, show how equi- librium price and the equilibrium number of firms change after trade. How could you measure the gains from trade? Explain briefly. 1 Intraindustry Trade Consider car makers that operate under monopolistic competition in symmetric equilibrium. Each monopolistic car maker produces with a total cost function TC = F +c.Qc, where F = 500,000 and c= 100. . What are the average and marginal cost functions of a car maker? Each of n car makers faces residual demand of QC=S. [1 b. (Pc Pc)], = - where S = 50,000, b= 1/1,000 and Pc is average equilibrium price. What are marginal revenues? (Hint: You may use the formula in the textbook. Otherwise, reformulate demand so that PM = PM(QM) and derive total revenue; differentiate total revenue with respect to quantity.] Graph the average-cost-variety (CC) and the price-variety (PP) schedules for this industry in a diagram that shows price, average cost and the number of firms (varieties). Find the number of firms (varieties in this industry in the absence of trade. What is price in a symmetric autarky equilibrium? Cars can be traded across countries at not cost. Using the average-cost- variety (CC) and the price-variety (PP) schedules above, show how equi- librium price and the equilibrium number of firms change after trade. How could you measure the gains from trade? Explain briefly