Question
In: Economics
A prescription drug is produced in the United States and sold internationally. Each unit of the...
A prescription drug is produced in the United States and sold
internationally.
Each unit of the drug costs $60 to produce. In the German market,
you sell the drug for
150 euros per unit. The current exchange rate is 0.667 U.S. dollars
per euro. Current
demand for the drug is 100 units, and the estimated elasticity is
2.5. Assuming a linear
demand curve, determine the appropriate sales price (in euros) for
the drug. SOLVE USING EXCEL SOLVER. NOTE: aLL PARTS OF THE QUESTION
ARE ALREADY INCLUDE HERE. NO EXTRA DATA SHEET.
Solutions
Expert Solution
The optimal solution is shown below, according to which price should be raised to $205 or 205/0.667 = 307.5 euros which will maximize profit.
Rahul Sunny answered 2 years agoRelated Solutions
If 12,500 units are produced and sold, what is the variable cost per unit produced and sold?
Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost Per UnitDirect materials$ 5.60Direct labor$ 3.10Variable manufacturing overhead$ 1.40Fixed manufacturing overhead$ 4.00Fixed selling expense$ 2.60Fixed administrative expense$ 2.20Sales commissions$ 1.20Variable administrative expense$ 0.454. If 12,500 units are produced and sold, what is the variable cost per unit produced and sold? (Round your answer to 2 decimal places.)
1. If 18,000 units are produced and sold, what is the variable cost per unit produced and sold?
Refer to the data given in Exercise 1-7. Answer all questions independently.
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Required:
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2. If 22,000 units are produced and sold, what is the variable cost per unit produced and sold?
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Suppose that in the United States 4 worker-hours are required to produce each unit of clothing...
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hours are required for a unit of food. Show your work.
A. Which country has an absolute advantage in each good?
B. Which country has a comparative advantage in each good?
C. If the labor force of the United states increases by a factor
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Suppose that in the United States 4 worker-hours are required to produce each unit of clothing...
Suppose that in the United States 4 worker-hours are required to
produce each unit of clothing and each unit of food. In Canada, 1
worker-hour is required for each unit of clothing and 2 worker
hours are required for a unit of food. Show your work.
A. Which country has an absolute advantage in each good?
B. Which country has a comparative advantage in each good?
1. If diminishing returns exist, then Each unit produced will cost incrementally more. Each unit produced...
1.
If diminishing returns exist, then
Each unit produced will cost incrementally more.
Each unit produced will cost incrementally less.
The total cost curve will be negatively sloped.
The total cost curve will be flat.
2.
For the perfectly competitive firm, the marginal revenue is
always
Decreasing.
Constant.
Increasing.
Equal to average total cost.
3.
Greater-than-normal profit represents
Below-average returns to capital.
Exploitation of workers.
Payment for entrepreneurship.
Explicit costs.
4.
A perfectly competitive firm will maximize profits by choosing...
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in the United States and internationally, have re-ignited the
debate over the current laws, regulation and accounting principles.
The relative merits of GAAP, which takes a “rules-based” approach
to accounting, versus IFRS, which takes a “principles-based”
approach have been under scrutiny. In the last couple of years, the
FASB announced that it intends to introduce more principles-based
standards to improve general accounting principles and
practices.
Organizations have internal control measures to detect fraud. In...
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