In the "reaction function" diagram of Question #18 above, if economies of scale exist for both firms, then protection instituted in the home market to keep out the foreign firm's product will, other things equal, cause HH to shift to the __________.
A) left (or downward) and also will cause FF to shift to the left (or downward)
B) left (or downward) and will cause FF to shift to the right (or upward)
C) right (or upward) and also will cause FF to shift to the right (or upward)
D) right (or upward) and will cause FF to shift to the left (or downward)

Question

Quizplus · Accepted Answer

The Answer of In the "reaction function" diagram of Question #18 above, if economies of scale exist for both firms, then protection instituted in the home market to keep out the foreign firm's product will, other things equal, cause HH to shift to the __________.
A) left (or downward) and also will cause FF to shift to the left (or downward)
B) left (or downward) and will cause FF to shift to the right (or upward)
C) right (or upward) and also will cause FF to shift to the right (or upward)
D) right (or upward) and will cause FF to shift to the left (or downward)

In the "Reaction Function" Diagram of Question #18 Above, If