Why are losses from trade unlikely?

© 2015. 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)

Chain Store Against Manufacturers: Regulation Can Mitigate Market Distortion

Contemporary domination of chain-stores in retailing is modeled, perceiving a monopolistic retailer as a market leader. A myriad of her suppliers compete in a monopolistic competitive sector, displaying quadratic consumers' preferences for a differentiated good. The leader announces her markup before the suppliers choose their prices/quantities. She may restrict the range of suppliers or allow for free entry. Then, a market distortion, stemming from double marginalization and excessive variety would be softened whenever the government allows the retailer to apply an entrance fee to the suppliers, or/and per-quantity sales subsidies (doing the opposite to usual Russian regulation)