The Importance of Being Small: Or when Countries are Areas and Not Points |
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2000 annual rate ACSL autarky price autarky relative prices CEPR common equilibrium price consumers located country always gains country firm increases critical price decreases defined depends difference in profits Discussion Papers domain R2 domestic firm duopoly effects Electronic equal evaluated at pc firm located firm quotes firm sets free trade gains from trade geographical sizes given global welfare Goswell Road higher under free impact implies integrated market international trade kink large country firm Lemma marginal consumer marginal costs mill price opening to trade parameter values partial derivative partial equilibrium pc is negative positive price configuration price higher price lower profit function profit-maximizing price Proof Proposition pure strategy quasi-concave R₁ readily verified reservation price RHS derivative rival firm second segment set a price small country firm small country gains spatial subscription total welfare change trade theory transport costs xm(P дп