Carrot Patch Dolls, a small doll producer in Malaysia, is considering producing a new doll variety. Production of this doll type requires an initial setup cost, followed by constant variable cost. The cost function of producing variety i is C = 12,000 + 2Qi, where Qi is the quantity of variety i. The demand function for this particular variety in Malaysia is Qi = 4000 – 1000p. Carrot Patch seeks to maximize its profit and will not produce the doll if it would make a loss (p < AC) by doing so. If Carrot Patch cannot sell the doll outside Malaysia, does it pay to produce this variety? What decision does it make if Carrot Patch is able to sell the doll in Singapore as well as Malaysia, where the demand curve is exactly the same as in Malaysia?
Answer to relevant QuestionsGiven the estimated demand function Equation 2.2 for avocados, Q = 104 – 40p + 20pt + 0.01Y, use algebra (or calculus) to show how the demand curve shifts as per capita income, Y, increases by $ 1,000 a year. Illustrate ...Using supply-and-demand diagrams, illustrate and explain the effect of an outward shift in the demand curve on price and quantity if a. The supply curve is horizontal. b. The supply curve is vertical. c. The supply curve is ...Suppose that one euro can be exchanged for 1.3 U.S. dollars and that one U.S. dollar can be exchanged for 80 Japanese yen. If these currencies can be traded freely with low transaction costs, what exchange rate would you ...Canada has 20% of the world’s known freshwater resources, yet many Canadians believe that the country has little or none to spare. Over the years, U.S. and Canadian firms have struck deals to export bulk shipments of water ...As a result of the North American Free Trade Agreement, many iconic “American” cars are not assembled in the United States. Explain why. Provide some examples of U.S. cars that are assembled outside of the United States.
Post your question