Three countries engage in the production of flax (an agricultural product). The market for flax in each country is perfectly competitive. Producers within a country are identical, but they differ across countries. Each producer has a constant marginal cost up to a particular level of capacity. Throughout this analysis, let's assume that there is no transportation cost between the countries. The following table summarizes supply and demand information across these countries (where quantities are in units per year and prices are in dollars per unit): Country Marginal cost Total flax capacity of country. Market demand curve Country 1 $50/unit 100 units D(P) = 300 - P Country 2 $40/unit 200 units D(P) = 150 - P Country 3 $30/unit 200 units D(P) = 150 - P

Three countries engage in the production of flax (an agricultural product). The market for flax in each country is perfectly competitive. Producers within a country are identical, but they differ across countries. Each producer has a constant marginal cost up to a particular level of capacity. Throughout this analysis, let's assume that there is no transportation cost between the countries. The following table summarizes supply and demand information across these countries (where quantities are in units per year and prices are in dollars per unit): Country Marginal cost Total flax capacity of country. Market demand curve Country 1 $50/unit 100 units D(P) = 300 - P Country 2 $40/unit 200 units D(P) = 150 - P Country 3 $30/unit 200 units D(P) = 150 - P

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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