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A Canadian firm is currently producing maple syrup in a factoryr in Toronto. The cost of producing each additional bottle of syrup is 33. The
A Canadian firm is currently producing maple syrup in a factoryr in Toronto. The cost of producing each additional bottle of syrup is 33. The rm is considering supplying the Brazilian market, hut they have two choices of how to do so. First, they could continue to produce in Toronto and ship their products by boat to Brazil. However, the cost of shipping each bottle would he an additional 51. Alternatively, they could open a new production plant directly in Brazil, but this would cost them S. The Canadian rm will he the only firm offering maple syrup in the Brazilian market, and as such, they face a demand function given by PF so otzaco a] Calculate the range of prices for which the firm will choose to export, and the range of prices for which the rm will choose FBI. [Note: I am not asking you the one profit maximizing price I'm asking about their optimal distribution choice for any given price they could charge, according to the demand function]
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