Belfrage, Carl-Johann (contributor); … - 2006
case, but less varieties are produced
locally and trade costs have to be paid for Foreign imports. The opposite is true for … given by X
A
= L
A
.
Perfect competition enforces marginal cost pricing, i.e. p
A
= w
L
and p
∗
A
= w
∗
L
. Taking
the … + K
∗
). Denoting the reward to capital π and each firm’s level of
output x,aM sector firm’s cost function is
TC= π + w
L …