Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Chapter 13, Problem 1.3CE
To determine

To describe:

The category of cost must be covered by the early penetration prices

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Steel is produced only in the US and the rest of the world (ROW). The inverse demand and supply in the US are p = 110 - Q8 and p = 20 + Qỗ, while in the ROW, they are p = 70 - Q and p = Qk. All quantities are in millions of tons and all prices are in dollars per ton. Since steel is produced more cheaply in the ROW, the US imports it from the ROW under international trade. At any price, p, the imports of the US, QM. is the excess demand for steel given by the difference between the quantity demanded and the quantity supplied domestically in the US: QM = Q% - Qi. Similarly, the exports of the ROw, QF, is the excess supply of steel given by the difference between how much they produce and how much they demand: QE = Qk - Qg. (b) Find the consumer and producer surplus in the US at the price p". consumer surplus $ million producer surplus million (c) The US government imposes a tax of $12 per unit on the ROw's exports. Find the new world equilibrium price, p**, and new world equilibrium…
The following graph shows the domestic demand for and supply of limes in Bangladesh. The world price (Pw) of limes is $800 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of limes and that there are no transportation or transaction costs associated with international trade in limes. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. PRICE (Dollars per ton) PRICE (Dollars per ton) 1120 1080 1040 1000 960 9:20 880 640 800 760 720 960 920 880 840 800 760 720 0 0 Domestic Demand 10 I 20 T I 10 20 Domestic Supply 70 60 50 30 40 QUANTITY (Tons of limes). 30 40 50 60 70 QUANTITY (Tons of limes) 80 A tariff set at this level would raise $ 80 90 100 PW 90 100 If Bangladesh is open to international trade in limes without any restrictions, it will…
The following graph shows the domestic demand for and supply of lemons in Panama. The world price (Pw) of lemons is $245 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of lemons and that there are no transportation or transaction costs associated with international trade in lemons. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. PRICE (Dollars per ton) 405 385 365 345 325 305 285 265 245 225 205 Domestic Demand 0 50 100 Domestic Supply PW 150 200 250 300 350 400 450 500 QUANTITY (Tons of lemons) If Panama is open to international trade in lemons without any restrictions, it will import tons of lemons.
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Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning