ECO 5745: Global Trade and Policy Problem Set 4 Qutition 1 Whan a monopolistically compatitive marbit spara up to international trade, the individual firm-lawed Jimand curved faced by such firm are allachool. Even before this prompts marlost antry or adt (which would further affect theie individual firm level demand curve), they shit outward (is, demand increased and bacame flatter. Part Al: Explain why opening up to trade loads the individual firm-boreal demand curves to shift outward Part pol: Explain why opening up to trade leach the individual firm level demand curve to become Malbar. Qutition 2 Part All: When a monopolistically compet the market opens up to intomantional brands, each firm produon a greater quantity of output than it did before Explain why this b. Part pol: Whan a monopolistical y compatitive market spara up to international trade, the total number of variants globally decmantis, but each cornumar has more variants to choose from. Explain how this is Quaition } Callow, you are provided with the firm-bowed demand, marginal nowinus, and rakewant cost curves for Jokin' Aides. Bookin' Ridin is . Gainesville-based firm that produces electric scooters in the monopolistically competive scooter market. Suppoin, initially, that this graph depicts the scenario in which scooter's are not inded internationally. Part All: Suppain that the United States does not tracks scooters internationally. Identify the profe- mike mary number of alovic scooters theint Backin' A das willsell, and the per-scooter price that it Part joy: Suppose that the Unload states does not trade scooters internationally, and that Bookin"Kickin produon and sells the quantity that you identified in port (0. How much profit dots Both Ride sam? What does this tell you about whathar there is currently an incentive for now firms to enter that domestic scooter marlost, or for ansting firms to ink the domas. cscooter market? Part full: Supports that the United States biggins to trade scooters incaminionally. Would Do kin" Rides now sam i profit or less if it wire to produce and sell the quantity that you idumufind in port /d? Bgain your mentoring canfully. Part fiel: Band on your answer to part full, two things should happen in the deodorant market adjuwa to foreign competition. The quanthey produced by each individual firm fe c. Barty Rickey) will change, and the total number of firms icthen in the market will change. Identity and explain the direction of each of these chant