Keuschnigg, Christian (contributor) - 2006
by a factor θ. For the same reason, an export firm
must produce a quantity k
X
>c
X
larger than what arrives at foreign … successfully picks up export business, it
must invest an extra k
X
of the standard good and will obtain value π
X
in addition to … period equal to π
T
X
= t(p−er)k
X
.
Since p
X
= θp, export demand in (2.6) is c
X
= A
f
/(θp)
ε
and yields revenues
pk
X
= p …