Firms in the home appliances sector of an economy, Home, are known to follow monopolistic competition. In autarky, each firm faces the following demand for its product: P = 100-2q. where p is the price of a firm's product and q is its output. Consider four home appliance producers in Home, A, B, C, and D, which have the following constant marginal cost of production, CA = 12, CB = 20, cc = 36, and CD = 40. a) Calculate the sales and price for each firm in autarky by completing the following table. Firm A Firm B Firm C Firm D CA = 12 CB = 20 Cc = 36 CD = 40 qA = AB = 4c = qD = 15 PA = PB Pc = PD = 70 The following information applies to parts (b) to (e). Home is open to trade with an economy of similar market size, Foreign. Each firm in the sector now faces a demand p" = 60-q" from the domestic market and p = 60-qx from the foreign market. To export to Foreign market, a firm must incur a fixed cost FE = $250 to advertise and set up new distribution channels for its products. There is no fixed cost involved with serving the domestic market only. The profit in each market for a firm is therefore: profitD = pD * q - c * q for domestic market , and profitEX = pEX * qEX - c* qEX - FEX for export market. b) Which firms survive in the domestic market when Home is open to trade? c) A firm will export to Foreign if it earns positive or at least zero export profit. Which firms will export to Foreign? d) What is the export profit of the most productive exporter in part (c)? e) If in addition to the fixed cost of $250, firms must now pay a tariff of $10 per unit of goods to enter Foreign market. Which firms will export to Foreign? f) What is the export profit of the most productive exporter in part (e)? g) To export to Foreign, firm A must pay the fixed cost and tariff as in part (d). As an alternative strategy to export, firm A can set up its production in Foreign, which is called the FDI strategy. In that case there will be no tariff or export fixed cost when selling its products in Foreign. The fixed cost to set up its production in Foreign is $400, which strategy should firm A choose FDI Export Neither