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The gure to the right shows an industry composed of a single monopolistic domestic rm. Initially, the rm sells its output exclusively in the domestic
The gure to the right shows an industry composed of a single monopolistic domestic rm. Initially, the rm sells its output exclusively in the domestic market. According to this gure, the prot-maximizing output level is D units and the price is $D. Now suppose that this domestic monopolist begins to sell in foreign markets as well, where it faces a perfectly elastic demand at $6.00. In the gure, using the line drawing tool, draw the demand curve this rm faces in its foreign markets. Label this line DF. Carefully follow the instructions above and only draw the required object. Now that this rm is operating in two segmented markets, the rm produces units of output and is accused of dumping because: O A. the foreign price of $6.00 is less than the domestic price of $8.00. 0 B. more output (4 units) is sold in foreign markets than at home (2 units). Cost, 0 and Price, P 2 3 4 5 6 7 8 Quantities produced and demanded, Q 9 10
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