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3. (14 points) Consider a firm with a plant in the U.S. and the U.K. .pdf

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3. (14 points) Consider a firm with a plant in the U.S. and the U.K. A U.S.-based shipper charges $2.50 per unit to ship between the two countries. Assume no taxes, and production occurs before shipping. A. Suppose that the exchange rate is 1.00=$1.85. What is the best production distribution plan? B. Given your plan in part A), what is the profit in each country (expressed in dollars)?.

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3. (14 points) Consider a firm with a plant in the U.S. and the U.K. A U.S.-based shipper charges $2.50 per unit to ship between the two countries. Assume no taxes, and production occurs before shipping. A. Suppose that the exchange rate is 1.00=$1.85. What is the best production distribution plan? B. Given your plan in part A), what is the profit in each country (expressed in dollars)?

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