A monopolistic competitor: O faces a perfectly elastic demand curve. 0 faces an elastic demand curve. 0 faces a unit elastic demand curve. 0 faces an inelastic demand curve. Which of the following is characteristic of monopolistically competitive industries? O Product differentiation. O A substantial likelihood of collusion. O Relatively small market shares of each producer. O Both (a) and (c) are characteristics of monopolistically competitive industries.China Imposes trade Does not impose sanctions against trade sanctions against United States firms United States firms Does not renew U.S.: $65 U.S.: $140 MFN status China: $5 with China China: $75 United States Does renew U.S.: $35 U.S.: $130 MFN status with China China: $285 China: $275 Refer to Exhibit 15-3. Assume that trade negotiators meet to discuss trade policy between the United States and China. If neither party to the negotiation is able to trust the other party, then: O it is rational for each to follow their dominant strategy. O each should assume that the other will choose a strategy that optimizes the combined total value of the trade relationship. O the Nash equilibrium will provide the largest possible gains to each party. Chinese negotiators should assume that United States negotiators will implement a policy that is in the mutual best interest of both countries