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7. The United States and Mexico can each produce automobiles for $20,000 and 230,000 pesos (P), respectively. Suppose that Mexican auto producers decide to lower
7. The United States and Mexico can each produce automobiles for $20,000 and 230,000 pesos (P), respectively. Suppose that Mexican auto producers decide to lower their price to begin selling in the US. market. Given trade costs of 10%, what is the maximum price they can establish (net of trade costs) that will allow them to sell Mexican autos at the same price as US. autos? A} P200900 B} P220,0UU C} P180,000 D) P181,818
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