Question
You have two factories that produce identical products (lets say plastic forks). The plants and equipment are fully depreciated and there are no fixed costs.
You have two factories that produce identical products (lets say plastic forks). The plants and equipment are fully depreciated and there are no fixed costs. Note, this is a competitive market.
As a result, your cost basis in the USA is TCusa = 80Yusa2
your cost basis in CHINA is TCchina = 48Ychina2
The demand for plastic forks is Y=488
Note, the production then becomes Y = Yusa + Ychina = 488
a. With no restrictions (competitive markets exist) how many plastic forks will the USA produce?
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Principles Of Macroeconomics
Authors: N Gregory Mankiw
7th Edition
1285165918, 9781285165912
