Question about monopoly business

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ABC is monopoly seller of aluminum in the United States and sells no aluminum on world market. It sells aluminum domestically for $2500 per ton and its average expense is $2200 per ton. The world price is $2000 per ton. (High tariffs prevent foreign firms from exporting into the U.S.)

True or False: "Obviously, ABC should not sell any aluminum on the world market." (Assume if it did it would have effect on the world price- the world market is perfectly competitive.) How if at all would your answer change if you know that ABC's technology had decreasing returns to scale? Explain.

 

Reference no: EM1374860

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