Suppose that you have one domestic production facility that supplies both the domestic and foreign markets. Assume that the demand for your product in the domestic market is Q = 2,000 – 2P and in the foreign market, demand is given by Q* = 2,000 – P*. Assume that your domestic marginal cost of production is 300. The initial real exchange rate is 1. What is the optimal quantity sold in the foreign market? Group of answer choices 710 825 750 850 None of the above
Suppose that you have one domestic production facility that supplies both the domestic and foreign markets. Assume that the demand for your product in the domestic market is Q = 2,000 – 2P and in the foreign market, demand is given by Q* = 2,000 – P*. Assume that your domestic marginal cost of production is 300. The initial real exchange rate is 1. What is the optimal quantity sold in the foreign market? Group of answer choices 710 825 750 850 None of the above
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that you have one domestic production facility that supplies both the domestic and foreign markets. Assume that the demand for your product in the domestic market is Q = 2,000 – 2P and in the foreign market, demand is given by Q* = 2,000 – P*. Assume that your domestic marginal cost of production is 300. The initial real exchange rate is 1. What is the optimal quantity sold in the foreign market?
Group of answer choices
710
825
750
850
None of the above
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