1. Recently. European Union (EU) governments approved a five-year EU trade protec- tion against grain-oriented electrical steel (GOES) from Russia, Japan, China, South Korea, and the United States. The protection would consist of minimum import prices on shipments of GOES from any of the five listed countries. This measure was enacted as a punishment for exporters in these countries for allegedly dumping their product (i.e.. selling below cost) on the European market. The European Steel Association lauded the plan, noting it would help protect an important subdivision of the steel industry. However, transformer manufacturers, who use GOES as an input to their pro- duction, have protested the minimum prices. They argue minimum prices will result in prices for GOES that are too high and lead some of these manufacturers to downsize or move production facilities outside the EU. Describe the various rivalries depicted in this scenario, and then use the five forces framework to analyze the industry. (LOI, LO3, L04, L07)

Principles of Microeconomics
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ISBN:9781305156050
Author:N. Gregory Mankiw
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Chapter10: Externalities
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21. Recently. European Union (EU) governments approved a five-year EU trade protec-
tion against grain-oriented electrical steel (GOES) from Russia, Japan, China, South
Korea, and the United States. The protection would consist of minimum import prices
on shipments of GOES from any of the five listed countries. This measure was enacted
as a punishment for exporters in these countries for allegedly dumping their product
(i.e.. selling below cost) on the European market. The European Steel Association
lauded the plan, noting it would help protect an important subdivision of the steel
industry. However, transformer manufacturers, who use GOES as an input to their pro-
duction, have protested the minimum prices. They argue minimum prices will result in
prices for GOES that are too high and lead some of these manufacturers to downsize
or move production facilities outside the EU. Describe the various rivalries depicted
in this scenario, and then use the five forces framework to analyze the industry.
(LOI, LO3, L04, L07)
Transcribed Image Text:21. Recently. European Union (EU) governments approved a five-year EU trade protec- tion against grain-oriented electrical steel (GOES) from Russia, Japan, China, South Korea, and the United States. The protection would consist of minimum import prices on shipments of GOES from any of the five listed countries. This measure was enacted as a punishment for exporters in these countries for allegedly dumping their product (i.e.. selling below cost) on the European market. The European Steel Association lauded the plan, noting it would help protect an important subdivision of the steel industry. However, transformer manufacturers, who use GOES as an input to their pro- duction, have protested the minimum prices. They argue minimum prices will result in prices for GOES that are too high and lead some of these manufacturers to downsize or move production facilities outside the EU. Describe the various rivalries depicted in this scenario, and then use the five forces framework to analyze the industry. (LOI, LO3, L04, L07)
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