International Dumping
Consider a firm - ABC Inc. - that sells calculators to Canada and France.
The demand forcalculators in each country is: Canada: P = 12 - 1/3Q France: P = 6 - 1/6Q
Assume that ABC's total cost function is: TC = 2Q
(a) If ABC is able to engage in international dumping, calculate the equilibrium prices and quantities in each market as well as their profits.
(b) In the absence of international dumping, calculate the equilibrium price and quantity as well astheir profits