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6. You have gone to work for the new high-end subsidiary of the Tommy Hilfiger clothing company. They ship silk for their suits from their

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6. You have gone to work for the new high-end subsidiary of the Tommy Hilfiger clothing company. They ship silk for their suits from their Chinese subsidiary to their US factory. The value of the silk shipped can be placed anywhere between 30 and 100 dollars per unit. The per unit costs in China are 35 dollars. The tax rate in China is 30%, whereas the tax rate in the US is 21%. The finished suits sell for $300, and there are additional costs of $100 in the US. What price maximizes your total after-tax profits? A. 30 B. 35 C. 1100 D. None of the above 7. Same set up as question 6, but now there is a 25% ad valorem tariff on silk imports to the U.S. What price now maximizes your after-tax profits? A. 30 B. 35 C. 100 D. None of the above

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