Suppose that a domestic monopolist in a small country faces demand of P = 200 - Q and
has a constant MC of $40 per unit.
A) Calculate the value of consumer and producer surplus in autarky.
B) Now suppose that trade occurs with a world price of $50.Calculate the value of
consumer and producer surplus.
C) By how much did the monopolist's profits fall as a result of the opening of trade?
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