Question: Looking for help with international trade theory. Assignment 6: The Monopolistic Competition Model (10 points + 1 bonus point) Consider two countries, home (H) and

Looking for help with international trade theory.

Looking for help with international trade theory. Assignment 6: The Monopolistic Competition

Assignment 6: The Monopolistic Competition Model (10 points + 1 bonus point) Consider two countries, home (H) and foreign (F) with the same technology for producing private jets. Each firm has the cost function: TC = F +cQ. where c = 5 and F = 1200. The demand function faced by each firm is: Q=s[=-b(P- P)] Where b = 1/1200. The home producers sell 900 private jets per year and the foreign producers sell 1600 private jets per year. The marginal revenue function of each firm is: MR = P- Sxb 1. What happens if firm i in home market sets a price higher than the price of other firms? Will it lose all its customers? (1 points)

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