Consider a firm sells its product in two different countries. It needs to decide what quantities...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Consider a firm sells its product in two different countries. It needs to decide what quantities to be sold in Country 1 (9₁) and Country 2 (92). The inverse demand functions are p₁ 60 - 0.59₁ in Country 1 and p2 = 90 - 92 in Country 2. Then, its total revenue function will be: = R(9₁,92) = R₁ (9₁) + R₂ (92) = (60 - 0.5q₁)q₁ + (90-92)92 = 609₁ - 0.5q1 +9092 - 9/² Suppose the firm has a constant per unit cost of c = 10, regardless of the country where the goods are sold. So, its total cost function is given by C(q₁, 92) = 10(9₁ +92). Therefore, the firm's profit function is T(9₁, 92) = R(q₁, 92) - C(9₁, 92) = 50q₁0.5q1 + 8092 - 9² The firm's problem is to choose the optimal output levels in each country (9₁, 92), that maximizes its total profit. Consider a firm sells its product in two different countries. It needs to decide what quantities to be sold in Country 1 (9₁) and Country 2 (92). The inverse demand functions are p₁ 60 - 0.59₁ in Country 1 and p2 = 90 - 92 in Country 2. Then, its total revenue function will be: = R(9₁,92) = R₁ (9₁) + R₂ (92) = (60 - 0.5q₁)q₁ + (90-92)92 = 609₁ - 0.5q1 +9092 - 9/² Suppose the firm has a constant per unit cost of c = 10, regardless of the country where the goods are sold. So, its total cost function is given by C(q₁, 92) = 10(9₁ +92). Therefore, the firm's profit function is T(9₁, 92) = R(q₁, 92) - C(9₁, 92) = 50q₁0.5q1 + 8092 - 9² The firm's problem is to choose the optimal output levels in each country (9₁, 92), that maximizes its total profit.
Expert Answer:
Related Book For
College Accounting A Contemporary Approach
ISBN: 978-0077639730
4th edition
Authors: David Haddock, John Price, Michael Farina
Posted Date:
Students also viewed these economics questions
-
The following balances were extracted from the trial balance of Bell Crest Ltd on 30 June 2020: Additional information 1, 2 1, 2 2, 3, 5 2 100 000 4, 5 4, 5 (120 000) R 800 000 1 200 000 Land at cost...
-
From the trial balance of Gail Lucas, Attorney-at-Law (Figure), prepare (a) An income statement for the month of May, (b) A statement of owners equity for the month ended May 31, (c) A balance sheet...
-
From the trial balance in Figure as well as additional data, complete a worksheet for Jabars Hardware. Additional Data a/b. Ending inventory on December 31 is calculated at $300. c. Insurance...
-
You are given the following prices for zero coupon bonds with $1,000 face amount: One-year bond Two-year bond Three year bond $945 $920 $900 Find the price today for a two-year 4% coupon bond.
-
How do we tell whether a budget deficit needs discretionary action to remove it?
-
Analyze your personal expenses on a variable and fixed basis. What are some of your personal fixed costs and variable costs? What would cause them to change?
-
What are the various types of shafts?
-
Here are some numbers that you can use to sharpen your computational skills for sample size determination. Crest Toothpaste is reviewing plans for its annual survey of toothpaste purchasers. With...
-
Actus reus usually depends on proof of a voluntary act or an omission. Mens rea is also required for criminal liability. Scenario 1: Alphonso believed that Francine, a work colleague had stolen his...
-
You have just been hired as a brand manager at Kelsey-White, an American multinational consumer goods company. Recently the firm invested in the development of K-W Vision, a series of systems and...
-
Can you think of a patient population (a culture, ethnicity, religious group, sexual orientation) with which you do not have much familiarity? How might this lack of knowledge impact the provision of...
-
Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 4%. You hold the bond for five years before selling it. a. If the bonds yield to maturity is 4% when you sell it, what is...
-
Several multilateral or regional development banks have been created since World War II. The last born is the Asian Infrastructure Investment Bank (AIIB) created effectively in January 2016. It...
-
Suppose you purchase a 10-year bond with 11% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bonds yield to maturity was 9.94% when...
-
Assume the current Treasury yield curve shows that the spot rates for six months, one year, and 1 years are 1%, 1.1%, and 1.3%, all quoted as semiannually compounded APRs. What is the price of a...
-
A BBB-rated corporate bond has a yield to maturity of 9%. A U.S. Treasury security has a yield to maturity of 7.5%. These yields are quoted as APRs with semiannual compounding. Both bonds pay...
-
Brooke the operator of a restaurant served a dinner to Adam. Adam had nearly finished his soup when he found several metal chips in the bottom of her bowl. in this case with the regard to the dinner...
-
PC Contractors, Inc., was an excavating business in Kansas City, Missouri. Union Bank made loans to PC, subject to a perfected security interest in its equipment and other assets, including...
-
1. Open the general ledger accounts and accounts receivable ledger accounts indicated below. 2. Post the entries from the general journal in Problem 7.2A to the appropriate accounts in the general...
-
On September 30, 2019, after one month of operation, the general ledger of Cross Timbers Company contained the accounts and balances shown below. INSTRUCTIONS 1. Prepare a partial worksheet with the...
-
You and four friends have decided to create a new service company called Unpacking for You. Your company unpacks for families once they have moved into a new house. Your business is primarily a cash...
-
What are the three types of employees who work in MNEs? Explain how an HCN could change to become a TCN in an MNE.
-
A large MNE in the cookware industry was having difficulties maintaining its market share due to a number of mergers among other competing firms in the industry. The MNE, with corporate headquarters...
-
What are the different types of organizational forms that corporations use for international operations?
Study smarter with the SolutionInn App