Answer:
$15,000 Increase
Explanation:
Calculation to determine what the effect on net income will be :
Effect on net income = (15,000 x $3.50) – ($2.50x 15,000)
Effect on net income = $52,500-$37,500
Effect on net income = $15,000 Increase
Therefore If Bluebird accepts this additional business , the effect on net income will be :$15,000 Increase
Answer:
Equilibrium price = $6
Total quantity in the market would be > 400 units ( unchanged )
Explanation:
Applying small=country model
world price of product = $6
import quota = 400 units
The Equilibrium price in Marketopia would be $6 and the total quantity available in Marketopia would > 400 units
This is because in a small country assumption model, the total imports made by any country is insignificant to the Total quantity of the products available in the market therefore it has no effect on the price of the products even if when the imports are stopped by the country
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