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Question 1. Use the model with heterogeneous firms that we developed in class to answer the following questions. Assume that E2 = 1000, 2

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Question 1. Use the model with heterogeneous firms that we developed in class to answer the following questions. Assume that E2 = 1000, 2 = 4, w = 1.5, w = 1.5, fp=6, fe = 1.25 and T = 0.2. a) What is the profit generated from serving the foreign market of an exporting firm for a given productivity level? Answer must be a function of 4. The profit from exporting is e (4) = b) What is the profit generated from serving the foreign market of an MNE for a given productivity level p? Answer must be a function of .. The profit of an MNE is (4) =

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