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# \$3.00Question 3

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Suppose you are a monopolist who faces a domestic demand curve given by Q= 1,000-2P.  Your domestic cost of production involves domestic costs per unit of 300 and a foreign cost per unit produced of 150.  If the real exchange rate is 1.1, what would be the price you would charge and the quanitity you would sell?  How do these variables change when the real exchange rate increases by 10%?

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• Posted on May 31, 2012 at 11:59:56PM
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Preview: ... he roots are 465 and 500, therefore the price is at middle of two roots. Thus, P=965/2=482.5 And Q=1000-96 ...

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Preview: ... Attached ...

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Answer to Question 3 in Excel.xlsx (10K)

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• Posted on Jun. 01, 2012 at 09:43:07AM
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