Homework Answers
Look at the AC curve and see the prices at quantity of 10,20 and 30 thousand
Within one factory it can produce 20000 dolls at $5.4
10000 dolls at $7.4
30000 dolls at $4.3
| Scenario | total production cost |
| Produce 10000 dolls in Russia and 20000 dolls in France | 7.4*10000+5.4*20000= $182000 |
| Produce 30000 dolls in same factory | 4.3*30000= $129000 |
Transportation cost= $2
If Igrushka produces 30000 dolls in Russia and transport 20000 to France
Total cost of production and shipping= 30000*4.3 + 2*20000= $169000
If Igrushka produces 30000 dolls in France and transport 10000 to Russia
Total cost of production and shipping= 30000*4.3 + 2*10000= $149000
● produce 30000 dolls in France and transport 10000 dolls to Russia
Reason- This case satisfy the demand for dolls in both countries and has least production and shipping cost.
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> Thank you so much! These answers are correct!
Lisa999 Sat, Oct 30, 2021 4:21 AM