Homework Help is Here – Start Your Trial Now!
Business
Economics
In the following table, complete the third column by determining the quantity sold in each country at a price of $20 per toy train. Next, complete the fourth column by calculating the total profit and the profit from each country under a single price. Country France Russia Total Price (Dollars per toy train) 20 20 N/A True Single Price Quantity Sold (Millions of toy trains) False N/A Profit (Millions of dollars) Price (Dollars per toy train) N/A Price Discrimination Quantity Sold (Millions of toy trains) N/A Suppose that as a profit-maximizing firm, Le Jouet decides to price discriminate by charging a different price in each market, while its marginal cost of production remains $12 per toy. Profit (Millions of dollars) Complete the last three columns in the previous table by determining the profit-maximizing price, the quantity sold at that price, the profit in each country, and total profit if Le Jouet price discriminates. Le Jouet charges a higher price in the market with a relatively elastic demand curve. True or False: Under price discrimination, Le Jouet is not dumping toy trains into the Russian market.

In the following table, complete the third column by determining the quantity sold in each country at a price of $20 per toy train. Next, complete the fourth column by calculating the total profit and the profit from each country under a single price. Country France Russia Total Price (Dollars per toy train) 20 20 N/A True Single Price Quantity Sold (Millions of toy trains) False N/A Profit (Millions of dollars) Price (Dollars per toy train) N/A Price Discrimination Quantity Sold (Millions of toy trains) N/A Suppose that as a profit-maximizing firm, Le Jouet decides to price discriminate by charging a different price in each market, while its marginal cost of production remains $12 per toy. Profit (Millions of dollars) Complete the last three columns in the previous table by determining the profit-maximizing price, the quantity sold at that price, the profit in each country, and total profit if Le Jouet price discriminates. Le Jouet charges a higher price in the market with a relatively elastic demand curve. True or False: Under price discrimination, Le Jouet is not dumping toy trains into the Russian market.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter13: best-practice Tactics: Game Theory
Section: Chapter Questions
Problem 1E
See similar textbooks
icon
Related questions
Question
Le Jouet is a French firm, and it is the only seller of toy trains in France and Russia. Suppose that when the price of toy trains increases, Russian children more readily replace them with toy airplanes than French children. Thus, the demand for toy trains in Russia is more elastic than in France. The following graphs show the demand curves for toy trains in France (Dr) and Russia (DR) and marginal revenue curves in France (MRF) and Russia (MRR). Le Jouet's marginal cost of production (MC), depicted as the grey horizontal line in both graphs, is $12, and the resale of toy trains from Russia to France is prohibited. Assume there are no fixed costs in production, so marginal cost equals average total cost (ATC). PRICE (Dollars per toy train) 40 36 32 28 Total 24 20 16 12 8 4 0 Country France Russia France MR Price (Dollars per toy train) 20 20 2 4 6 8 10 12 14 16 18 20 QUANTITY (Millions of toy trains) N/A O True MC-ATC OF O False N/A (?) Single Price Quantity Sold (Millions of toy trains) PRICE (Dollars per toy train) 40 36 32 28 24 20 16 Suppose that as a nondiscriminating seller, Le Jouet charges the same price of $20 per toy train in each of the two markets. 12 In the following table, complete the third column by determining the quantity sold in each country at a price of $20 per toy train. Next, complete the fourth column by calculating the total profit and the profit from each country under a single price. 8 4 0 Profit (Millions of dollars) Russia D₂ MR₂ 02 4 6 8 10 12 14 16 18 20 QUANTITY (Millions of toy trains) Price (Dollars per toy train) N/A MC-ATC Le Jouet charges a higher price in the market with a relatively elastic demand curve. True or False: Under price discrimination, Le Jouet is not dumping toy trains into the Russian market. (?) Suppose that as a profit-maximizing firm, Le Jouet decides to price discriminate by charging a different price in each market, while its marginal cost of production remains $12 per toy. Price Discrimination Quantity Sold (Millions of toy trains) N/A Complete the last three columns in the previous table by determining the profit-maximizing price, the quantity sold at that price, the profit in each country, and total profit if Le Jouet price discriminates. Profit (Millions of dollars)
Transcribed Image Text:Le Jouet is a French firm, and it is the only seller of toy trains in France and Russia. Suppose that when the price of toy trains increases, Russian children more readily replace them with toy airplanes than French children. Thus, the demand for toy trains in Russia is more elastic than in France. The following graphs show the demand curves for toy trains in France (Dr) and Russia (DR) and marginal revenue curves in France (MRF) and Russia (MRR). Le Jouet's marginal cost of production (MC), depicted as the grey horizontal line in both graphs, is $12, and the resale of toy trains from Russia to France is prohibited. Assume there are no fixed costs in production, so marginal cost equals average total cost (ATC). PRICE (Dollars per toy train) 40 36 32 28 Total 24 20 16 12 8 4 0 Country France Russia France MR Price (Dollars per toy train) 20 20 2 4 6 8 10 12 14 16 18 20 QUANTITY (Millions of toy trains) N/A O True MC-ATC OF O False N/A (?) Single Price Quantity Sold (Millions of toy trains) PRICE (Dollars per toy train) 40 36 32 28 24 20 16 Suppose that as a nondiscriminating seller, Le Jouet charges the same price of $20 per toy train in each of the two markets. 12 In the following table, complete the third column by determining the quantity sold in each country at a price of $20 per toy train. Next, complete the fourth column by calculating the total profit and the profit from each country under a single price. 8 4 0 Profit (Millions of dollars) Russia D₂ MR₂ 02 4 6 8 10 12 14 16 18 20 QUANTITY (Millions of toy trains) Price (Dollars per toy train) N/A MC-ATC Le Jouet charges a higher price in the market with a relatively elastic demand curve. True or False: Under price discrimination, Le Jouet is not dumping toy trains into the Russian market. (?) Suppose that as a profit-maximizing firm, Le Jouet decides to price discriminate by charging a different price in each market, while its marginal cost of production remains $12 per toy. Price Discrimination Quantity Sold (Millions of toy trains) N/A Complete the last three columns in the previous table by determining the profit-maximizing price, the quantity sold at that price, the profit in each country, and total profit if Le Jouet price discriminates. Profit (Millions of dollars)
Expert Solution
steps

Step by step

Solved in 5 steps with 9 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Demand and Supply Curves
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Managerial Economics: Applications, Strategies an…
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Microeconomics: Private and Public Choice (MindTa…
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Micro Economics For Today
Micro Economics For Today
Economics
ISBN:
9781337613064
Author:
Tucker, Irvin B.
Publisher:
Cengage,
Economics For Today
Economics For Today
Economics
ISBN:
9781337613040
Author:
Tucker
Publisher:
Cengage Learning
Survey Of Economics
Survey Of Economics
Economics
ISBN:
9781337111522
Author:
Tucker, Irvin B.
Publisher:
Cengage,
SEE MORE TEXTBOOKS