Giocattolo is a profit-maximizing firm producing toy cars, which it can produce and sell in its home country, Italy, and abroad in Spain. The averagecost (AC) curve on the following graph represents Giocattolo's cost of producing toy cars within one factory, whether in Italy or in Spain.COST (Dollars per toy car)101010I120 30 40 50 60 7080QUANTITY (Thousands of toy cars)AC90 100Suppose that at the current market price of toy cars, the demand for Giocattolo's product is 10,000 toy cars per year in Italy and 20,000 toy cars peryear in Spain. (Hint: Select each point on the previous graph to see its coordinates.)(?)Based on Giocattolo's average cost curve, within one factory it can produce 20,000 toy cars at Sper toy car, and produce the total of 30,000 toy cars at Sper toy car.Complete the following table by indicating Giocattolo's total production cost for each scenario.Total Production Cost(Dollars)ScenarioProduce 10,000 toy cars in Italy and 20,000 toy cars in Spain.Produce 30,000 toy cars at the same factory.per toy car, produce 10,000 toy cars atNow suppose that if Giocattolo produces toy cars in one country and sells them in the other, it incurs an additional shipping cost equal to $2.00 pertransported toy car.If Giocattolo produces 30,000 toy cars in Italy and transports 20,000 of them to Spain, its total cost of production and shipping isSIf Giocattolo produces 30,000 toy cars in Spain and transports 10,000 of them to Italy, its total cost of production and shipping isSO Produce 30,000 toy cars in Italy and ship 20,000 toy cars to Spain.O Produce 30,000 toy cars in Spain and ship 10,000 toy cars to Italy.O Produce 30,000 toy cars in either Italy or Spain.O Produce 10,000 toy cars in Italy and 20,000 toy cars in Spain.Based on Giocattolo's production and shipping costs determined in the previous questions, which of the following is Giocattolo's best productionstrategy?

Since the AC curve is given to us, we match corresponding quantities to price. Please match these…

Suppose that at the current market price of toy cars, the demand for Giocattolo's product is 10,000 toy cars per year in Italy and 20,000 toy cars per year in Spain. (Hint: Select each point on the previous graph to see its coordinates.)

Suppose that at the current market price of toy cars, the demand for Giocattolo's product is 10,000 toy cars per year in Italy and 20,000 toy cars per year in Spain. (Hint: Select each point on the previous graph to see its coordinates.)

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 4PA

See similar textbooks

Related questions

Q: What are the main components of measuring

A: The market price of all finished (final) items and services generated in a country's economy during…

Q: Product X currently sells for $12 per unit. The variable costs is $4 per unit and 10,000 units are…

A: Here(break-even), where your income (deals or turnover) approaches(equals) total costs. At…

Q: From March 26 to July 17, 2020, the share price of The Champion SA (C share) fell by 17% and that of…

A: Fixed costs are those costs that do not depend on the quantity produced or sold by the firms.…

Q: where

A: Resource implies to all the materials accessible in our environment which are technologically…

Q: The University is considering the level of light to provide at night on campus. Cynthia and Shirley…

A: Marginal benefit is the total amount which is consumer willing to pay for marginal or per additional…

Q: Which statement matches the evidence presented in the trade and inequality podcast best? Trade makes…

A: Note: We will answer the first question as the exact one was not specified. Please resubmit a new…

Q: As the Federal Reserve sharply raises rates in the face if substantial inflationary pressures,…

A: Inflationary pressure is the continuous increase in the general price level in an economy. During…

Q: Several factors may be influential on the behaviour of buyers and there also exists different types…

A: Shoppers and organizations purchasers vary enormously as the fundamental reason for these two sorts…

Q: An investment firm has $1 million to invest in stocks, bonds, certificates of deposit, and real…

A: An investment firm has $1,000,000 to invest and real estate over 6 years of time- Investment…

Q: Twenty years from now, Angelo plans to buy a new motorbike worth BD10,000. The current rate of…

A: FV = 10,000 r = 8% n = 20

Q: Question 3 Suppose that quantity demand falls by 29 as a result of a 14% increase in price. The…

A: Elasticity refers to a usual measurement of a variable's responsiveness to changes in other…

Q: A consumer has the following utility function u(x)= root x where x is the consumer’s total wealth.…

A: A utility function is a representation used to describe personal preferences for products or…

Q: Government statisticians have estimated that . frictional unemployment is 3.5%; and structural…

A: Natural Rate of Unemployment = Frictional Unemployment + Structural Unemployment It is defined as…

Q: Call centers today play an important role in managing day-to-day business communications with…

A: The histogram is showing percentage on the Y-axis and the seconds on the X-axis.

Q: Which of the following transactions would be included in GDP? a. Abeer buys a newly constructed…

A: When talking about gross domestic product, it can be said that it is the income measurement tool for…

Q: Explain why the Cedi continues to depreciate against most major international currencies.

A: Currency depreciation is the decrease in the value of a country's currency in relation to one or…

Q: At 20% cpd. monthly., find the capitalized cost of a bridge whose cost is P673777 with a life of 22…

A: Capitalized cost = Initial Cost + (Rehabilitation Cost-Salvage Value)/((1+i)^n-1)

Q: calculate the consumer surplus and producer surplus at a price of $11 and $6

A: Given

Q: "While gasoline taxes and fuel economy standards can both be effective in increasing the number of…

A: The realities affirm that gas appraisals and mileage rules can both be strong in extending the…

Q: Explain why the Cedi continues to depreciate against most major international currencies and offer…

A: Currency depreciation, which often occurs under a floating exchange rate system when no official…

Q: Refer to the information provided in Table Table Federal purchases of goods Services Imports Change…

A: Given; Federal purchase= 800Services=500Imports= 200Change in business inventories= 40Durable goods=…

Q: True or false? The GDP deflator measures prices of a group of products called the "market basket"…

A: The Consumer Price Index measures the overall change in consumer prices over time based on a…

Q: Predict the demand for December using 4-period moving average.

A: To compute 4 month average for December Use the four months before it. Average Aug, Sep, Oct and Nov…

Q: 4. The table refers to an open economy with a government sector. In which situation is the economy…

A: Aggregate expenditure is the sum of consumption, investment, government spending and net exports…

Q: Suppose this firm has the capacity to produce up to 11 airplanes of this particular type. If the…

A: For maximizing Total Revenue the corporation would like to sell as much as they can produce. TR will…

Q: Why Ghana is considered an importer of inflation?

A: Inflation is generally a situation where the increase in prices can be seen and they are evident…

Q: Price $2.50 2.00 1.50 1.00 0.50 H Sd Do 0 100 200 300 400 500 600 Quantity Refer to the graph, which…

A: Given information: We have given the domestic demand and domestic supply curve for a product. There…

Q: As the Federal Reserve sharply raises rates in the face if substantial inflationary pressures,…

A: Inflationary pressure is the continuous increase in the general price level in an economy. During…

Q: 6) You have a balance of $7500 on your credit card and you make no further charges. If your APR is…

A: The interest rate is the amount charged on top of the chief by a lender to a borrower for the…

Q: QUESTION 14 Which of the following does not describe an individual who uses the S-shaped value…

A: According to the prospect hypothesis, investors place a distinct amount of importance on gains and…

Q: 3. True or false? - Argue graphically and provide intuitions in the two-period consumption-saving…

A: Given information 2-period consumption model 2 periods: Current period and future period Government…

Q: What are the things that a developing country should improve in order to strengthen its position in…

A: Having more money implies organizations have the assets to acquire capital, further develop…

Q: VALUATE THE REQUIRED VALUE BASED ON THE GIVEN STANDARD NOTATION BD20,500 (A/P, 9%, 7) 2.…

A: 1. BD20,500 (A/P, 9%, 7) 2. BD590 (F/A, 5%, 10)

Q: Solve it as soon as possible If 45 units are sold at a price of $15 and 75 units are sold at a…

A: Price elasticity of demand refers to the proportion extrade in the amount of demand that…

Q: 1000 750 ÏILLE 500 1250 250

A: Each sum is communicated in the worth of the cash at that specific time, alluded to as future…

Q: What is wrong with this answer?

A: The correct answer is No one would have an incentive to work once they had earned $200,000, so…

Q: What is demand? (

A: Demand is a powerful economic factor because it drives businesses to produce, develop supplies, and…

Q: Why firm operates in the market adopting a marginal thinking(i.e. produce at MR=MC). Why do not they…

A: The condition of equality of marginal revenue and Marginal cost is the point of profit maximization…

Q: Suppose a firm is producing an output level for which price exceeds average total cost. From this…

A: Average total cost is alluded to as the whole of all creation costs separated by the total amount of…

Q: Both monopolists and perfectly competitive firms options: maximize profit at the quantity where…

A: The entire number of buyers and sellers in the area or region under consideration is referred to as…

Q: Round to one decimal place and do not enter the % sign. If your answer is 6.15%, enter 6.2. If…

A: The unemployment rate is a process of computing the % of the labor force that is jobless. As the…

Q: Companies like Amazon and Facebook and Google are so dominant that they really have very little…

A: Oligopoly and Monopoly An oligopoly is a form of market where there are a few larger numbers of…

Q: 1- Provide one reason why there is so much advertising in the monopolistic competitive industry?

A: Monopolistic competition happens when an industry has many firms offering items that are…

Q: 6) You have a balance of $7500 on your credit card and you make no further charges. If your APR is…

A: An interest rate is the level of chief charged by the lender for the utilization of its cash. The…

Q: ind the optimal amount of labour and capital that you will be using, and compute the total cost.

A: Put given Q = 200 and solve for K put that value in Cost and minimize Cost. Find optimum values of…

Q: QUESTION 1 The two defining features of command -and -control regulation are: O a.…

A: Order and control is a kind of economic guideline that permits strategy creators to explicitly…

Q: An integrated, combined cycle power plant produces 285 MW of electricity by gasifying coal. The…

A: Initial Cost = 570 million Each of first two year Cash flow = 285 million Let the price per MW be…

Q: Suppose that Redeye's Game Emporium is in a market with imperfect competition. The graph below shows…

A: Firms in imperfect competition maximize profit by producing at a level where marginal revenue equals…

Q: An economy is experiencing a high rate of inflation. The government wants to reduce consumption by…

A: C= a+ bYd C = a +b(Y-T) Differentiating C with respect to T

Q: Suppose that the spot exchange rate is 1.6 euros per dollar, and that the annual interest rates for…

A: The forward exchange rate is the rate of exchange, settled upon now, for an unfamiliar exchange…

Question

Giocattolo is a profit-maximizing firm producing toy cars, which it can produce and sell in its home country, Italy, and abroad in Spain. The average
cost (AC) curve on the following graph represents Giocattolo's cost of producing toy cars within one factory, whether in Italy or in Spain.
COST (Dollars per toy car)
10
1
0
10
I
1
20 30 40 50 60 70
80
QUANTITY (Thousands of toy cars)
AC
90 100
Suppose that at the current market price of toy cars, the demand for Giocattolo's product is 10,000 toy cars per year in Italy and 20,000 toy cars per
year in Spain. (Hint: Select each point on the previous graph to see its coordinates.)
(?)
Based on Giocattolo's average cost curve, within one factory it can produce 20,000 toy cars at S
per toy car, and produce the total of 30,000 toy cars at S
per toy car.
Complete the following table by indicating Giocattolo's total production cost for each scenario.
Total Production Cost
(Dollars)
Scenario
Produce 10,000 toy cars in Italy and 20,000 toy cars in Spain.
Produce 30,000 toy cars at the same factory.
per toy car, produce 10,000 toy cars at
Now suppose that if Giocattolo produces toy cars in one country and sells them in the other, it incurs an additional shipping cost equal to $2.00 per
transported toy car.
If Giocattolo produces 30,000 toy cars in Italy and transports 20,000 of them to Spain, its total cost of production and shipping is
S
If Giocattolo produces 30,000 toy cars in Spain and transports 10,000 of them to Italy, its total cost of production and shipping is
S
O Produce 30,000 toy cars in Italy and ship 20,000 toy cars to Spain.
O Produce 30,000 toy cars in Spain and ship 10,000 toy cars to Italy.
O Produce 30,000 toy cars in either Italy or Spain.
O Produce 10,000 toy cars in Italy and 20,000 toy cars in Spain.
Based on Giocattolo's production and shipping costs determined in the previous questions, which of the following is Giocattolo's best production
strategy?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.