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Consider a domestic monopolist in a small country facing the following demand curve: Q(P) = A - P. Where Q is the quantity demanded of

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Consider a domestic monopolist in a small country facing the following demand curve: Q(P) = A - P. Where Q is the quantity demanded of a good and P is its price level. The cost function of the firm is given by: C(Q) = BQ+=Q2 Further assume that A>B>C>0. (a) Compute the autarky price (PM) and quantity (Qw). [2 marks] (b) Suppose the country now opens to trade, with world price PW, and that PW

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