To Expand or-not? A supplier in the country of Whiteland has current output of 10...
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To Expand or-not? A supplier in the country of Whiteland has current output of 10 Million units priced at $1.10 per unit. Factor prices rise and costs increase to $1.30 per unit. Uh-oh... now not earning profit and producing for a $20 Million loss. The availability of competitor substitutes convince the supplier a price increase is out of the question. A purchasing agent from the country of Knightland makes a timely appearance and offers to purchase for import an additional 10 Million units priced at $0.80 per unit. For 3 pts: do you take the deal? For 4 pts: what principle/s do you apply to make your decision? For 3 pts: what is the size of the opportunity, if-any
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