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You produce tires. Your neighbor produces rims. Your neighbor suggests trading 25% of his annual production to you for 50% of your annual production. You
You produce tires. Your neighbor produces rims. Your neighbor suggests trading 25% of his annual production to you for 50% of your annual production. You produce 100,000 tires per year while your neighbor produces 40,000 rims. Your tires sell for $150 per set of 4, while your neighbors rims sell for $600 per set of 4. If you accept this trade, how much profit will you net from this transaction?
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