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Before trade, this country produces where MR=MC,
with production Q1
and price Pd.
(1)
After trade, the world price PW
is lower than Pd (but still higher than
where DD=MC). Thus the good is infinitely imported or exported
with price PW.
The domestic monopolist produces where PW=MC
as PW=MR: in other words, it produces
Q2
and consumers consume Q3.
Then the amount exported is Q2 - Q3.
(2)
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