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7. A firm located in the US exports its goods to the Eurozone and sells them for 50 euros a piece (marginal revenue is 5
Posted: Wed Jul 06, 2022 5:59 am
by answerhappygod
- 7 A Firm Located In The Us Exports Its Goods To The Eurozone And Sells Them For 50 Euros A Piece Marginal Revenue Is 5 1 (123.08 KiB) Viewed 13 times
7. A firm located in the US exports its goods to the Eurozone and sells them for 50 euros a piece (marginal revenue is 50 euros). The firm employs workers in the US to produce the goods, and has total and marginal costs equal to and Q, respectively. Costs are denominated in US dollars while revenues are denominated in euros. Suppose that the exchange rate of the dollar against the euro is Edollar/euro = 1 in 2022 and the dollar is expected to appreciate 10% with respect to the euro in 2023. Find the quantity produced and profits of the firm in 2022 and 2023. Give intuition for your results.