Question
Suppose a US manufacturer can produce electric scooters in Mexico or Indonesia. The scooters from both locations are identical and they both face the following
Suppose a US manufacturer can produce electric scooters in Mexico or Indonesia. The scooters
from both locations are identical and they both face the following total annual demand here in the United States:
P = 320 - 0.6Qd where Qd = Qi + Qm. (Assume the quantity here is already in thousands so you don't have to
make any adjustments.) What if the total cost of producing scooters in Mexico is TCm = 100 + 2Q2m, while in
Indonesia it is TCi = 200 + 0.5Q2i. What is the optimal price to charge in the US market? How many scooters
will be produced in each country?
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The Business of Tourism Management
Authors: John Beech, Simon Chadwick
1st edition
273688013, 273688014, 9781405871631 , 978-0273688013
