Suppose you are the Mercedes dealer in Saudi Arabia, thus selling Mercedes cars and spare parts all over the country. Suppose you face the problem in September 2022 that the Mercedes factories in Germany have been disrupted by the high gas prices, such that they are no longer producing spare parts. So you have the problem of trying to find sources of Mercedes spare parts to sell to your own customers. If you cant supply those spare parts, the customers will start buying other cars and your revenue will suffer.

• Is this the kind of problem government is good at solving or the private market is better at solving?

• Is the production of Mercedes spare parts itself subject to increasing returns to scale or decreasing returns to scale?

• Would it be possible for Saudi Arabia to set up its own Mercedes spare parts production factories in 12 months?

• If you were the Saudi Arabian Mercedes car seller faced with the hypothetical problem given above, what would you do when customers ask you for spare parts you can no longer receive from the Mercedes factories (10 points)?

 

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Question No: 04 20221861242 This is a subjective question, hence you have to write your answer in the Text-Field given below. 77840 Sketch areah the region enclo [5] 1 enclosed by the curves: y=x², y = √x, x = 1, x= x= 1 and find its enclosed Question No: 04 20221861242 This is a subjective question, hence you have to write your answer in the Text-Field given below. 77840 Sketch areah the region enclo [5] 1 enclosed by the curves: y=x², y = √x, x = 1, x= x= 1 and find its enclosed

Answer rating: 100% (QA)

The Saudi Arabian government could try to solve this problem by setting up its own Mer... View the full answer