International Production You have two factories that produce identical products (lets say plastic forks) The plants and equipment are fully depreciated and there are no xed costs Note, this Is a competitive market As a result, your cost basis in the USA is TCUSE 16'1 55,2 your cost basis in CHINA is chnma Waning The demand for plastic forks is Y 2 Note, the production then becomes Y Yum Ychina 72 a With no restrictions competitive markets exist) hornr manyr plastic forks will the USA produce 3 Points If b How much would China need to lower their cost to produce all of the 72 plastic forks o 5 Points c How much of a subsidy would the rm need to produce all 72 plastic forks in the USA, given the original TC functions o5 Points

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International Production You have two factories that produce identical products (lets say plastic forks)  The plants and equipment are fully depreciated and there are no xed costs  Note, this Is a competitive market  As a result, your cost basis in the USA is TCUSE   16'1     55,2 your cost basis in CHINA is chnma   Waning  The demand for plastic forks is Y  2 Note, the production then becomes Y   Yum   Ychina   72 a  With no restrictions  competitive markets exist) hornr manyr plastic forks will the USA produce  3 Points If          b  How much would China need to lower their cost to produce all of the 72 plastic forks  o  5 Points c  How much of a subsidy would the rm need to produce all 72   plastic forks in the USA, given the original TC functions  o5 Points

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International Production You have two factories that produce identical products (lets say plastic forks). The plants and equipment are fully depreciated and there are no

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