Chaney (2008) presents a Melitz (2003) model where the distribution of productivity o is a Pareto distribution. The Pareto cumulative distribution function is given by G() =1-4 , for 4 21, and 0>0-1>0. (18) Hence the density of the Pareto distribution is given by dG(2) = 040-0-1 (19) dy In the lecture, we have seen that the autarky zero profit cutoff productivity 4. is defined by the free entry condition which can be written as fel fa = J(pa) = / [(p/4pa)0-1 - 1/g(4) dy. (20) There will be a unique solution for 4. if J(Y.) is monotonically decreasing in Va, i.e., aJ(Pa) /24a