M12 Tgrushka is a Russian firm, and it is the only seller of wooden dolls in Russia and France. Suppose that when the price of wooden dolls increases,French children more readily replace them with porcelain dolls than Russian children. Thus, the demand for wooden dolls in France is more elastic thanin Russia.The following graphs show the demand curves for wooden dolls in Russia (De) and France (Dr) and marginal revenue curves in Russia (MR) andFrance (MR). Igrushka's marginal cost of production (MC), depicted as the grey horizontal line in both graphs, is $8, and the resale of wooden dollsfrom France to Russia is prohibited. Assume there are no fixed costs in production, so marginal cost equals average total cost (ATC).FranceRussiaPRICE (Dollars per wooden doll)9822&2:PRICE (Dollars per wooden doll)=#82EENSMCHATOMC ATCDDMRMR10 12 14 16 18 2016 18 202448 10 12 14QUANTITY (Milions of wooden doils)Suppose that as a nondiscriminating seller, Igrushka charges the same price of $18 per wooden doll in each of the two markets.In the following table, complete the third column by determining the quantity sold in each country at a price of $18 per wooden doll. Next, completethe fourth column by calculating the total profit and the profit from each country under a single price.PriceSingle PriceQuantity Sold(Millions ofwooden dolls)Profit(Millions ofdollars)(Dollars perwooden doll)18Price(Dollars perwooden doll)Price DiscriminationQuantity Sold(Millions ofwooden dolls)Profit(Millions ofdollars)CountryRussiaFrance18TotalN/AN/AN/AN/ASuppose that as a profit-maximizing firm, Igrushka decides to price discriminate by charging a different price in each market, while its marginal cost ofproduction remains $8 per toy.Complete the last three columns in the previous table by determining the profit-maximizing price, the quantity sold at that price, the profit in eachcountry, and total profit if Igrushka price discriminates.elastic demand curve.Igrushka charges a higher price in the market with a relativelyTrue or False: Under price discrimination, Igrushka is not dumping wooden dolls into the French market.

Price discrimination is a selling strategy that charges clients various prices for a similar item or…

Tgrushka is a Russian firm, and it is the only seller of wooden dolls in Russia and France. Suppose that when the price of wooden dolls increases, French children more readily replace them with porcelain dolls than Russian children. Thus, the demand for wooden dolls in France is more elastic than in Russia. The following graphs show the demand curves for wooden dolls in Russia (Da) and France (Dy) and marginal revenue curves in Russia (MR) and France (MR). Igrushka's marginal cost of production (MC), depicted as the grey horizontal line in both graphs, is $8, and the resale of wooden dolls from France to Russia is prohibited. Assume there are no fixed costs in production, so marginal cost equals average total cost (ATC). France Russia

Tgrushka is a Russian firm, and it is the only seller of wooden dolls in Russia and France. Suppose that when the price of wooden dolls increases, French children more readily replace them with porcelain dolls than Russian children. Thus, the demand for wooden dolls in France is more elastic than in Russia. The following graphs show the demand curves for wooden dolls in Russia (Da) and France (Dy) and marginal revenue curves in Russia (MR) and France (MR). Igrushka's marginal cost of production (MC), depicted as the grey horizontal line in both graphs, is $8, and the resale of wooden dolls from France to Russia is prohibited. Assume there are no fixed costs in production, so marginal cost equals average total cost (ATC). France Russia

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Your grandparents decide they would like to put aside money to help support each of their…

A: Grandparents want to give $18000 to their grandchild on the 18th birthday of the grandchild. That…

Q: The present value of a perpetuity paying $20 at the end of every four years is $43. Find i.

Q: Automobile repair shops typically recommend that their customers change their oil and oil filter…

A: Cost incurred will be calculated by the following formula: Cost = miles driver/ total miles * cost…

Q: The payback period analysis fails to recognize the difference between the present and future value…

A: The money was anything which is being accepted by the society and has the characteristics such as…

Q: Your coin collection contains fifty 1952 silver dollars. If your grandparents purchased them for…

A: Coin Collection: Some persons have hobbies or habits to collect coins of various denominators,…

Q: The South Korean Government in the 1970s decided to follow a strategy of increased investment in…

A: Scarcity refers to the limited availability of resources, that are used to produce goods and…

Q: an saw an item at a local department store that she considered purchasing but did not. After getting…

A: Forgery: It refers to a situation in which the people signs or copy the signature of some other…

Q: Use PMT= 1- -nt to determine the regular payment amount, rounded to the nearest dollar. Your credit…

A: given that, Principal(P) =$3200 rate of interest(r) = 0.12 time (t) = 2 years n = 12

Q: Logan has $2,000 in a checking account and wants to buy a new MacBook for $1,100. Logan decides he…

A: Economic rationality suggests that people behave in a rational way, consider all the alternative…

Q: one method to spend more money is to deduct an amount automatically from your salary in a direct…

A: The direct deposit system refers to the system that allows banks to transfer a specific amount…

Q: If $18,000 is invested at 9% for 15 years, find the future value if the interest is compounded…

A: The formula to be used is At = Ao [1 + r / 2 ]2t Where, At = future valueAo = 18,000r = 9% or 0.09t…

Q: When you are 32, you win $20,000 in the lottery. You decide to spend half of your winnings…

A: The personal financial situation is affected by individual choices regarding financial decisions.…

Q: If today you deposit $500 in a savings account that offers a monthly compounding interest rate of…

A: Let's take into consideration the given values which are as :- Principal (P) = $500 Annual rate (R)…

Q: Fiat money is accepted as money becaus?

A: The term is gotten from the Latin word fiat, and that implies an assurance by power — for this…

Q: You deposit $1,200 in an account each year for 5 years, starting at the end of Year 1. At the end of…

A: The future value of cash flow refers to the value of a sum of money or a series of cash flows at a…

Q: Identify and explain the three main characteristics and uses of money.

A: Money is something, for the most part acknowledged as a vehicle of trade, a proportion of…

Question

M12

Tgrushka is a Russian firm, and it is the only seller of wooden dolls in Russia and France. Suppose that when the price of wooden dolls increases,
French children more readily replace them with porcelain dolls than Russian children. Thus, the demand for wooden dolls in France is more elastic than
in Russia.
The following graphs show the demand curves for wooden dolls in Russia (De) and France (Dr) and marginal revenue curves in Russia (MR) and
France (MR). Igrushka's marginal cost of production (MC), depicted as the grey horizontal line in both graphs, is $8, and the resale of wooden dolls
from France to Russia is prohibited. Assume there are no fixed costs in production, so marginal cost equals average total cost (ATC).
France
Russia
PRICE (Dollars per wooden doll)
9822&2:
PRICE (Dollars per wooden doll)
=#82EENS
MCHATO
MC ATC
D
D
MR
MR
10 12 14 16 18 20
16 18 20
2448 10 12 14
QUANTITY (Milions of wooden doils)
Suppose that as a nondiscriminating seller, Igrushka charges the same price of $18 per wooden doll in each of the two markets.
In the following table, complete the third column by determining the quantity sold in each country at a price of $18 per wooden doll. Next, complete
the fourth column by calculating the total profit and the profit from each country under a single price.
Price
Single Price
Quantity Sold
(Millions of
wooden dolls)
Profit
(Millions of
dollars)
(Dollars per
wooden doll)
18
Price
(Dollars per
wooden doll)
Price Discrimination
Quantity Sold
(Millions of
wooden dolls)
Profit
(Millions of
dollars)
Country
Russia
France
18
Total
N/A
N/A
N/A
N/A
Suppose that as a profit-maximizing firm, Igrushka decides to price discriminate by charging a different price in each market, while its marginal cost of
production remains $8 per toy.
Complete the last three columns in the previous table by determining the profit-maximizing price, the quantity sold at that price, the profit in each
country, and total profit if Igrushka price discriminates.
elastic demand curve.
Igrushka charges a higher price in the market with a relatively
True or False: Under price discrimination, Igrushka is not dumping wooden dolls into the French market.

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!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

If the interest rate is 7.0%, what is the present value of a perpetuity paying $210 per year? (A perpetuity is a bond that makes payments forever.) Round to the nearest dollar. Do not use dollar signs or commas in your answer. Example: if the answer is $1,234.56, then write "1235"
28
You take out a loan of $12,000 to pay for a piece of equipment. You plan to repay the loan in 16 years. You can afford to pay a maximum of $1,100 each year. What interest rate would allow for you to pay off the entirely of the loan in equal payments?
James has been working as a Mechanical Engineer ever since he graduated five years ago. Two years ago, he bought and financed a new $25,000 Jeep Compass and still owes $15,750 on his car loan. He has never been late with a car payment. James has one major credit card, with a $1,000 limit. He has had it since his senior year of college and was two months late with a payment one time during that first year. He is currently carrying a balance of $600 on this card. In the last year, James applied for six store credit cards at places that he shops a lot so that he can earn points and get discounts. He carries no balances Part 1: Calculate James’ credit score. Recalculate his credit score if he had not opened the six store credit cards. Part 2: James is tired of paying rent and would like to purchase a condo so that he can start building equity in his home. He is looking for a 30-year mortgage to purchase a $240,000 condo. What interest rate does James qualify for on a mortgage with his…
Which is the most desirable form of a lump-sum settlement?
Chelsea has to pay a series of uniform annual payments over a fixed period of time to repay a loan that would amount to $1,000,000. If Chelsea has to pay $30,000 per year for a rate of 6%, how long should she pay these uniform payments in order to repay her loan?
Someone’s uncle leaves them $10,000 in his will, but with a requirement that they invest the money into retirement savings. Their brother suggests a Roth IRA, but their sister suggests a Traditional IRA. Explain which one they should choose.
Would you consider Noodles or Cigarettes have become the new form of currency within the prison system for inmates? Why?
A space colony on the moon initially used moon rocks as currency, but they became heavy and cumbersome to use. Now most moon citizens store their rocks in a guarded storage facility and receive receipts they can trade for goods and services and/or exchange back for moon rocks at any time. All receipts stand for moon rocks actually held in storage. If there are 10 million moon rocks stored, there will be exactly 10 million moon rocks' worth of receipts circulating. In other words, the moon's currency is: (We'll use this information again in the next question.) A. commodity money B. fully backed C. legal tender D. fiat money
iv. The U.S. already has several ways to make digital transactions, for example, credit/debit cards, Venmo, Zelle, PayPal, and so on. How would a digital currency increase efficiency?
Please assist if possible.
When you purchase a T-shirt for $25, money is serving which function? Medium of exchange Standard of deferred payments Store of value Unit of account