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2. Suppose the Home firm is considering whether to enter the Foreign market. Assume that the...
Suppose the Home firm is considering whether to enter the Foreign market. Assume that the Home...
Suppose the Home firm is considering whether to enter the Foreign market. Assume that the Home firm has the following costs and demand: Fixed costs = $140 Marginal costs = $10 per unit Local price = $25 Local quantity = 20 Export price = $15 Export quantity = 10 a. Calculate the firm's total costs from selling only in the local market. b. What is the firm's average cost from selling only in the local market? c. Calculate the firm's...
Suppose the Home firm is considering whether to enter the Foreign market. Assume that the Home...
Suppose the Home firm is considering whether to enter the Foreign market. Assume that the Home firm has the following costs and demand: Fixed costs = $100 Marginal costs = $15 per unit Local price = $30 Local quantity = 40 Export price = $25 Export quantity = 20 Calculate the firm’s total costs from selling only in the local market What is the firm’s average cost from selling only in the local market? Calculate the firm’s profit from selling...
Dumping Assume that a firm is a monopolist at Home facing the inverse-demand curve, P =...
Dumping Assume that a firm is a monopolist at Home facing the inverse-demand curve, P = 10 − Q, but is one of many competitors in the world market, where it can sell its output at a price Pw = 2. Furthermore, assume that the firm’s total cost is given by: T C (Q) = 10 + Q2 . Answer the following questions: (a) Find the optimal level of output that maximizes the firm’s total profits. Is it optimal for...
Dumping. Assume that a firm is a monopolist at Home facing the inverse-demand curve, P =...
Dumping. Assume that a firm is a monopolist at Home facing the inverse-demand curve, P = 10 − Q, but is one of many competitors in the world market, where it can sell its output at a price Pw = 2. Furthermore, assume that the firm’s total cost is given by: T C (Q) = 10 + (Q^2)/2. Answer the following questions: (a) Find the optimal level of output that maximizes the firm’s total profits. Is it optimal for the...
Suppose that the market for candles is a competitive market. The following graph shows the daily cost curves of a firm operating in this market.
5. Profit maximization and shutting down in the short run Suppose that the market for candles is a competitive market. The following graph shows the daily cost curves of a firm operating in this market.For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the graph to identify its total variable cost. Assume that if the firm is indifferent...
Suppose that the market for black sweaters is a competitive market. The following graph shows the daily cost curves of a firm operating in this market.
5. Profit maximization and shutting down in the short
runSuppose that the market for black sweaters is a competitive
market. The following graph shows the daily cost curves of a firm
operating in this market.For each price in the following table, calculate the firm's
optimal quantity of units to produce, and determine the profit or
loss if it produces at that quantity, using the data from the
previous graph to identify its total variable cost. Assume that if
the firm...
Suppose that the market for microwave ovens is a competitive market. The following graph shows the daily cost curves of a firm operating in this market.
5. Profit maximization and shutting down in the short
runSuppose that the market for microwave ovens is a competitive
market. The following graph shows the daily cost curves of a firm
operating in this market.For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the previous graph to identify its total variable cost. Assume that if the firm...
6. Suppose that both Home and Foreign move from autarky to a free-trade regime and the...
6. Suppose that both Home and Foreign move from autarky to a free-trade regime and the trade price of product X is 0.4Y. From the Hone perspective, the trade price is than the marginal cost of product X, which isSo, the Home economy under free trade. So, the X industry must A) smaller; 0.5Y; exit B) greater; 0.5Y; overtake C) smaller; 0.25Y; exit D) greater; 0.25Y; overtake 1. Again, suppose that both Home and Foreign move from autarky to a...
Suppose that the market for sports watches is a competitive market. The following graph shows the daily cost curves of a firm operating in this market.
5. Protit maximization and shutting down in the short run Suppose that the market for sports watches is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the previous graph to identify its total variable cost. Assume that if the firm...
6. Dumping is defined as selling a good abroad at prices below its cost of production...
6. Dumping is defined as selling a good abroad at prices below its cost of production or below the price charged in the home market. selling a good abroad at prices above the costs of the firms in the foreign countries. exporting goods that are sources of pollution. exporting goods that are of inferior quality. Question 7 Free trade policies may lead to some labor sectors experiencing some short-term job loss. a decrease in world output. price increases in world...
5. Profit maximization and shutting down in the short
runSuppose that the market for black sweaters is a competitive
market. The following graph shows the daily cost curves of a firm
operating in this market.For each price in the following table, calculate the firm's
optimal quantity of units to produce, and determine the profit or
loss if it produces at that quantity, using the data from the
previous graph to identify its total variable cost. Assume that if
the firm...
6. Suppose that both Home and Foreign move from autarky to a free-trade regime and the trade price of product X is 0.4Y. From the Hone perspective, the trade price is than the marginal cost of product X, which isSo, the Home economy under free trade. So, the X industry must A) smaller; 0.5Y; exit B) greater; 0.5Y; overtake C) smaller; 0.25Y; exit D) greater; 0.25Y; overtake 1. Again, suppose that both Home and Foreign move from autarky to a...
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