The following three graphs show international dumping schedules faced by British Toys, Inc. (BTI) in the...
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The following three graphs show international dumping schedules faced by British Toys, Inc. (BTI) in the United Kingdom and Canada, the combined demand and marginal revenue schedules for the two markets, and BTI's average total cost and marginal cost schedules. Use the following three graphs to answer the questions that follow. (Note: You will not be graded on any adjustments made to any of the three graphs.) (? United Kingdom 12 11 10 MC "A ATC 7 PUK Price 3 MR 1 200 400 600 80 1000 1200 QUANTITY (Toys) PRICE (Dollars per toy) Canada 8 ATC Price 200 400 600 00 1000 QUANTITY (Toys) 4- 11 PRICE (Dollars per toy) Canada 8 ATC Price 200 400 600 00 1000 QUANTITY (Toys) 4- 11 PRICE (Dollars per toy) Total Market 16 15 14 MC 13 12 11 ATC MC ATC Price 3 Total Profit DUK+C 1. MR 200 400 00 80 1000 1200 1400 1600 QUANTITY (Hundreds of toys) In the absence of international dumping, BTI charges a uniform price to U.K. and Canadian customers (ignoring transportation costs). The firm's profit-maximizing output is toys, the price is s , and total profit is S . Based on the graphs for the United Kingdom market and the Canadian market, respectively, BTI's profits on its U.K. sales v BTI's profits on its Canadian sales. Suppose now that BTI engages in international dumping. Then in the U.K., BTI charges the price of $ per toy, and the profits that it accrues on U.K. sales goes to s In Canada, BTI charges the price of $ per toy, and the profits that it accrues on Canadian sales equal . With dumping, total profits by s compared to the case of a nondiscriminating seller. PRICE (Dollars per toy) The following three graphs show international dumping schedules faced by British Toys, Inc. (BTI) in the United Kingdom and Canada, the combined demand and marginal revenue schedules for the two markets, and BTI's average total cost and marginal cost schedules. Use the following three graphs to answer the questions that follow. (Note: You will not be graded on any adjustments made to any of the three graphs.) (? United Kingdom 12 11 10 MC "A ATC 7 PUK Price 3 MR 1 200 400 600 80 1000 1200 QUANTITY (Toys) PRICE (Dollars per toy) Canada 8 ATC Price 200 400 600 00 1000 QUANTITY (Toys) 4- 11 PRICE (Dollars per toy) Canada 8 ATC Price 200 400 600 00 1000 QUANTITY (Toys) 4- 11 PRICE (Dollars per toy) Total Market 16 15 14 MC 13 12 11 ATC MC ATC Price 3 Total Profit DUK+C 1. MR 200 400 00 80 1000 1200 1400 1600 QUANTITY (Hundreds of toys) In the absence of international dumping, BTI charges a uniform price to U.K. and Canadian customers (ignoring transportation costs). The firm's profit-maximizing output is toys, the price is s , and total profit is S . Based on the graphs for the United Kingdom market and the Canadian market, respectively, BTI's profits on its U.K. sales v BTI's profits on its Canadian sales. Suppose now that BTI engages in international dumping. Then in the U.K., BTI charges the price of $ per toy, and the profits that it accrues on U.K. sales goes to s In Canada, BTI charges the price of $ per toy, and the profits that it accrues on Canadian sales equal . With dumping, total profits by s compared to the case of a nondiscriminating seller. PRICE (Dollars per toy)
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Fundamentals of Investing
ISBN: 978-0133075359
12th edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
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