Philippines You're the manager of global opportunities for a U.S. manufacturer that is considering expanding sales into Asia. Your market research has identified the market potential in Malaysia, the Philippines, and Singapore as described in the following table: Success Level Big Mediocre Failure Malaysia Probability 0.3 0.2 0.5 Units 1,100,000 352,000 0 Philippines Probability 0.3 0.3 0.4 Units 1,300,000 650,000 0 Singapore Probability 0.7 0.1 0.2 Units 600,000 360,000 0
Philippines You're the manager of global opportunities for a U.S. manufacturer that is considering expanding sales into Asia. Your market research has identified the market potential in Malaysia, the Philippines, and Singapore as described in the following table: Success Level Big Mediocre Failure Malaysia Probability 0.3 0.2 0.5 Units 1,100,000 352,000 0 Philippines Probability 0.3 0.3 0.4 Units 1,300,000 650,000 0 Singapore Probability 0.7 0.1 0.2 Units 600,000 360,000 0
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Philippines
You're the manager of global opportunities for a U.S. manufacturer that is considering expanding sales into Asia. Your market research has identified the market potential in Malaysia, the Philippines, and Singapore as described in the following table:
|
|
Success Level
|
||
|---|---|---|---|
|
Big
|
Mediocre
|
Failure
|
|
| Malaysia | |||
| Probability | 0.3 | 0.2 | 0.5 |
| Units | 1,100,000 | 352,000 | 0 |
| Philippines | |||
| Probability | 0.3 | 0.3 | 0.4 |
| Units | 1,300,000 | 650,000 | 0 |
| Singapore | |||
| Probability | 0.7 | 0.1 | 0.2 |
| Units | 600,000 | 360,000 | 0 |
The product sells for $20, and each unit has a constant marginal cost of $16. Assume that the (fixed) cost of entering the market (regardless of which market you select) is $500,000.
In the following table, enter the expected number of units sold, and the expected profit, from entering each market.
|
Market
|
Expected Number of Units Sold
|
Expected Profit
|
|---|---|---|
| Malaysia |
|
|
| Philippines |
|
|
| Singapore |
|
|
If you were to enter one of the previously described markets, which one would you enter in order to earn the highest expected profit?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education