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What are the key assumptions that allow strategic trade

1. What are the key assumptions that allow strategic trade policy to work in the Brander- Spencer example of Airbus and Boeing?

2. Suppose that the European Commission asked you to develop a brief on behalf of sub- sidizing European software development-bearing in mind that the software industry is currently dominated by U.S. ?rms, notably Microsoft. What arguments would you use? What are the weaknesses in those arguments?

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Microeconomics: What are the key assumptions that allow strategic trade

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