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Part II: The Ecosta company too has monopoly power in two countries, home and foreign. At home, it faces a demand curve given by Q
Part II: The Ecosta company too has monopoly power in two countries, home and foreign. At home, it faces a demand curve given by Q =1 - P In the foreign country, demand is given by Q* = 2 - 4P* Acosta's cost function is given by 1Q C = = 1. Assuming that price differentiation is available, determine the monopoly price set by Ecosta in each country. 2. Determine Ecosta's total revenue, cost and profit for each country. 3. Now assume that the country with the lower monopoly price set by Ecosta imposes an antidumping duty equal to 10 cents (note that all prices are denoted in dollars). Determine Acosta's new monopoly price in that country, as well as its total revenue, cost and profit. 4. Determine the tariff revenue, the surplus transfer and the DWL for the country imposing the antidumping duty. Does the country experience a welfare gain or loss from the imposition of the antidumping duty? Give a numerical answer. 5. Calculate the maximal legal antidumping duty the country with the lower monopoly price could impose on its imports
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