Suppose that the Hoang family, like many farmers in the village of Boi Khe, incur transaction costs equal to 22% only if when they decide to sell their sugarcane in the Ha Noi regional market and 30% only if when they decide to sell in the Hai Phong regional market. Refer to Figure 11-5. 

(a) Given these transaction costs, the Hoang household’s net price received from selling sugarcane in Hai Phong is? 

(b) Given these transaction costs, what is the total quantity of sugarcane sold to the Hai Phong regional market.

 

Figure 11-5 Price ($ per ton) $350 Sa (village) Ha Noi Price $250 $225 $215 Hai Phong Price $100 Da (village) 150 200 250 300 Quantity (tons of sugarcane) 100