A domestic shoe company distributes running shoes and tennis shoes for $90 per pair to it domestic shoe retailers. The marginal cost of producing a pair of running shoes is $50 and the marginal cost of producing a pair of tennis shoes is $45. Ignore any potential issues of bundling the two types of shoes together as part of the sale and any competitive effects that internationa sales might have on current domestic sales. A Chinese retailer offers to purchase running shoes for $55 per pair and tennis shoes for $55 per pair, for distribution in China. Suppose the domestic shoe company has a maximum capacity of 60,000 pairs of running shoes and 50,000 pairs of tennis shoes in total, of which 40,000 pairs of running shoes and 45,000 pairs of tennis shoes can be sold to domestic retailers. How many pairs of running shoes would you allocate to the domestic market if the Chinese retailer offers to purchase 15,000 of running shoes? a. 60,000 pairs Ob.40,000 pairs c. 45,000 pairs d. 15,000 pairs

A domestic shoe company distributes running shoes and tennis shoes for $90 per pair to it domestic shoe retailers. The marginal cost of producing a pair of running shoes is $50 and the marginal cost of producing a pair of tennis shoes is $45. Ignore any potential issues of bundling the two types of shoes together as part of the sale and any competitive effects that internationa sales might have on current domestic sales. A Chinese retailer offers to purchase running shoes for $55 per pair and tennis shoes for $55 per pair, for distribution in China. Suppose the domestic shoe company has a maximum capacity of 60,000 pairs of running shoes and 50,000 pairs of tennis shoes in total, of which 40,000 pairs of running shoes and 45,000 pairs of tennis shoes can be sold to domestic retailers. How many pairs of running shoes would you allocate to the domestic market if the Chinese retailer offers to purchase 15,000 of running shoes? a. 60,000 pairs Ob.40,000 pairs c. 45,000 pairs d. 15,000 pairs

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 2CMA

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