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Suppose a medical-product export country decides to impose an export restraint (to restrict the quantity of medical product exports). Assuming the medical-product industry has imperfect

Suppose a medical-product export country decides to impose an export restraint (to restrict the quantity of medical product exports). Assuming the medical-product industry has imperfect competition (such as monopoly) in the import country, use a domestic-market graph to show:

  • the effects of the export restraint (as opposed to free trade) on the IMPORT country's domestic price, domestic output, and import quantity;
  • how would the IMPORT country's consumer surplus and producer surplus be affected by the export country's export restraint?
  • What other consequences could arise in this case as a result of the export restraint?

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