HomeCo Coffee Company has been granted the right to hold a monopoly over coffee sales in its home country, where demand is PH = 50 2QH . It also sells on the inter- national market, where there is lots of competition and it acts as a price taker, facing international price PI = 10. Its marginal cost of producing coffee is MC(QT) = 21QT, where QT = QH + QI is the sum of coffee sold at home and internationally. There is no fixed cost.

(a) What is the formula for marginal revenue at home, MRH(QH)? What is the marginal revenue internationally, MRI(QI)? (Note: you do not need to show your work for this one part.)

(b) How much should HomeCo sell in the home country and internationally? What price does it charge in the home country?

(c) Now suppose the home country's government imposes an export tariff on HomeCo of $2 per unit sold on the international market. (I.e., if HomeCo sells QI units internationally, then the revenue collected from the tariff is 2 QI .) From HomeCo's perspective, this effectively decreases the international price to PI = 8. How much tariff revenue does the home country's government actually collect?