Consider a firm that sells its product in both the U.S. and the U.K. U.S....
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Consider a firm that sells its product in both the U.S. and the U.K. U.S. demand is for 10,000 units, and the U.S. production capacity is 8,000 units. Demand in the U.K. is for 6,000 units, and the U.K. production capacity is 12,000 units. Production cost in the U.S. is $10, and production cost in the U.K. is 4. The current exchange rate is $2.8 = 1. The shipping cost is $1 per unit for any units shipped between the two countries. Sales prices equate to $100 in each country. How many units should be made in each country? A. U.S. = 10,000; U.K. = 6,000 B. U.S. = 8,000; U.K. = 0 C. U.S. = 8,000; U.K. = 8000 D. U.S. = 4,000; U.K. = 12,000 E. U.S. = 0; U.K. 16,000 OF. U.S. = 16,000; U.K. = 0 O G. U.S. = 8,000; U.K. = 6,000
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