A firm sells its cars in Brazil and India. The demand function in Brazil is OR = (A/PB)², and Qi = (A/P¡)° in India, where A is a constant. Marginal cost of producing one car is $10000 (a) The price elasticity of demand for the cars in Brazil is_; Suppose re-sales across countries are prohibitively expensive due to transportation costs and language difference so that one can consider the two markets totally separated and charges different prices. (b) The firm will charge $__in Brazil --- (c) The firm will charge $. in India.

A firm sells its cars in Brazil and India. The demand function in Brazil is OR = (A/PB)², and Qi = (A/P¡)° in India, where A is a constant. Marginal cost of producing one car is $10000 (a) The price elasticity of demand for the cars in Brazil is_; Suppose re-sales across countries are prohibitively expensive due to transportation costs and language difference so that one can consider the two markets totally separated and charges different prices. (b) The firm will charge $__in Brazil --- (c) The firm will charge $. in India.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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