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Xina manufactures a fragrance that can is made at a factory in the United States and a plant in France:
France Cost Function: TCF = 2Q2F + 2QF
United States Cost Function: TCUSA = ½Q2USA + 4QUSA
The market demand is: P = 243 - ½Q
A. What is the profit-maximizing price?
B. What is the Quantity produced in each Country?
C. What are Xina's total profits if the firm is effectively able to produce in both Countries?
D. Calculate the profit-maximizing level of price and output if Xina closes its United States factories? What are Xina's profits in this condition?
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