subject
Business, 16.06.2021 21:10 bobgardner765

Suppose the fixed costs for a firm in the Automobile industry (start-up costs of factories, capital equipment, and so on) are $5 billion and that variable costs are equal to $17,000 per finished automobile. Because more firms increase competition in the market, the market price falls as more firms enter an automobile market, or specifically, P = 17,000 + (150/n), where n represents the number of firms in the market. Assume that the initial size of the U. S. and Canadian automobile markets are 300 million and 533 million people, respectively. Required:
a. Calculate the equilibrium number of firms in the U. S. and Canadian automobile market without trade.
b. What is the equilibrium price of automobiles in the U. S. and Canada if the automobile industry is closed to foreign trade?
c. Suppose that the U. S. decides on free trade in automobiles with Canada. The trade agreement with Canada adds 533 million consumers to the automobiles market, in addition to the 300 million in the U. S. How many automobile firms will there be in the U. S. and Canada combined? What will be the new equilibrium price of automobiles?
d. Why are prices in the U. S. different in (c) and (b)? Are consumers better off with free trade? In what ways?

ansver
Answers: 3

Other questions on the subject: Business

image
Business, 22.06.2019 12:50, emarquez05
Two products, qi and vh, emerge from a joint process. product qi has been allocated $34,300 of the total joint costs of $55,000. a total of 2,900 units of product qi are produced from the joint process. product qi can be sold at the split-off point for $11 per unit, or it can be processed further for an additional total cost of $10,900 and then sold for $13 per unit. if product qi is processed further and sold, what would be the financial advantage (disadvantage) for the company compared with sale in its unprocessed form directly after the split-off point?
Answers: 2
image
Business, 22.06.2019 13:10, princessgabbee8452
Paid-in-capital in excess of par represents the amount of proceeds a. from the original sale of common stock b. in excess of the par value from the original sale of common stock c. at the current market value of the common stock d. at the curent book value of the common stock
Answers: 1
image
Business, 22.06.2019 16:50, amayarayne5
Arestaurant that creates a new type of sandwich is using (blank) as a method of competition.
Answers: 1
image
Business, 22.06.2019 19:10, kingjustin0825
Below are the steps in the measurement process of external transactions. arrange them from first (1) to last (6). event step post transactions to the general ledger. assess whether the transaction results in a debit or credit to account balances. use source documents to identify accounts affected by an external transaction. analyze the impact of the transaction on the accounting equation. prepare a trial balance. record the transaction in a journal using debits and credits.
Answers: 3
You know the right answer?
Suppose the fixed costs for a firm in the Automobile industry (start-up costs of factories, capital...

Questions in other subjects:

Konu
Computers and Technology, 19.11.2020 14:00
Konu
Advanced Placement (AP), 19.11.2020 14:00
Konu
Chemistry, 19.11.2020 14:00