Suppose the home firm is considering whether to enter the foreign market. Assume

that the home firm has the following costs and demand:

Fixed costs = $400

Marginal costs = $13 per unit

Local price = $25

Local quantity = 20

Export price = $26

Export quantity = 20

a. What is the firm's average cost from selling only in the local market?

b. Calculate the firm's profit from selling (i) just to Home's market; (ii) to both markets.

c. Is the home firm dumping? Briefly explain.