Suppose that the marginal cost of an additional ton of steel produced by a Japanese firm is the same whether the steel is set aside for domestic use or exported abroad
If the price elasticity of demand for steel is greater abroad than it is in Japan, which of the following will be correct? A) The Japanese firm will sell more steel abroad than they will sell in Japan.
B) The Japanese firm will sell more steel in Japan than they will sell abroad.
C) The Japanese firm will sell steel at a lower price abroad than they will charge domestic users.
D) The Japanese firm will sell steel at a higher price abroad than they will charge domestic users.
E) Insufficient information exists to determine whether the price or quantity will be higher or lower abroad.
C
You might also like to view...
Free riding often results than less than the optimal quantity of a good being produced
Indicate whether the statement is true or false
If a corporation retains all its profits and distributes none of the profit to owners, how can owners benefit?
A) If the retained earnings are expected to create future profits, the market price of the firm's stock will increase and create a capital gain for stockholders if the stock is sold. B) Shares of stock can be converted into bonds so stockholders will be able to earn coupon payments. C) Owners will benefit by changing the board of directors. D) Owners will only benefit if some profits are paid out in the form of dividends.