Many countries subsidize some of their exporting industries. Use a partial equilibrium model

under perfect competition to illustrate the effects of an export subsidy for a large country.

(ii)) Give a detailed illustration of the welfare effects of an export subsidy.

) Explain the reciprocal dumping model. State the main assumptions of this model.

(ii) Explain why there is dumping in this model.

(iii) State and discuss the conditions for gains from trade in this model. Explain the welfare effects implied by this

model in detail.