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Why are losses from trade unlikely? (English) Zbl 1321.91044

Summary: Examining a standard monopolistic competition model with unspecified utility/cost functions, we find necessary and sufficient conditions on their elasticities for welfare losses to arise from trade or market expansion. Two numerical examples explain the losses (under unrealistic elasticities).

MSC:

91B24 Microeconomic theory (price theory and economic markets)
91B60 Trade models
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References:

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