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2000 annual rate ACSl autarky relative prices CEPR common equilibrium price consumer surplus change consumers located country always gains country firm increases critical price d'Aspremont difference in profits domain R2 domestic firm effects Electronic Email equal equilibrium locations evaluated at pc firm decreases firm located firm quotes firm's firms to relocate foreign firm free trade gains from trade geographical sizes given global welfare higher under free impact implies income inequality integrated market international trade kink large country firm Lemma liberalisation located at 1/2 Louvain-la-Neuve marginal consumer marginal costs mill price opening to trade parameter values partial derivative partial equilibrium positive price configuration price higher price lower price set profit function profit-maximizing price Proof pure strategy R3 and R4 readily verified reservation price RHS derivative second segment set a price small country firm small country gains subscription terms of trade total welfare change trade theory