Suppose that Samsung’s production costs are the same in both China and India. Also suppose that Samsung can produce cell phones in China for an average cost of $10 per phone for 300 million phones, $12 per phone for 200 million phones, and $15 per phone for 100 million phones. If customers in India demand 100 million phones and customers in China demand 200 million phones, Samsung’s lowest-cost option is to A. produce 150 million phones in India for Indian demand and 50 million to export to China and produce 150 million phones in China for Chinese demand. B. produce 100 million phones in India for Indian demand and produce 200 million phones in China for Chinese demand. C. produce phones only in India and export phones to China. D. produce phones only in China and export phones to India.
Suppose that Samsung’s production costs are the same in both China and India. Also suppose that Samsung can produce cell phones in China for an average cost of $10 per phone for 300 million phones, $12 per phone for 200 million phones, and $15 per phone for 100 million phones. If customers in India demand 100 million phones and customers in China demand 200 million phones, Samsung’s lowest-cost option is to A. produce 150 million phones in India for Indian demand and 50 million to export to China and produce 150 million phones in China for Chinese demand. B. produce 100 million phones in India for Indian demand and produce 200 million phones in China for Chinese demand. C. produce phones only in India and export phones to China. D. produce phones only in China and export phones to India.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that Samsung’s production costs are the same in both China and India. Also suppose that Samsung can produce cell phones in China for an average cost of $10 per phone for 300 million phones, $12 per phone for 200 million phones, and $15 per phone for 100 million phones. If customers in India demand 100 million phones and customers in China demand 200 million phones, Samsung’s lowest-cost option is to
| A. |
produce 150 million phones in India for Indian demand and 50 million to export to China and produce 150 million phones in China for Chinese demand. |
|
| B. |
produce 100 million phones in India for Indian demand and produce 200 million phones in China for Chinese demand. |
|
| C. |
produce phones only in India and export phones to China. |
|
| D. |
produce phones only in China and export phones to India. |
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