Business, help asap!
posted by Victoria on .
here is the case.
While in Australia, you discover a raspberry jam with incredible flavour. You know Canadians would enjoy this product, so you import it. The jam sells in stores for $5.00 a jar, a slightly higher price than standrad jam. The Canadian consumer is willing to pay $5, but when some retailers try to sell it for $6, the demand drops condsiderably. As an importer you have been trying to hold the cost price constant.
1) What are the potential benefits for you and the jam manufacturer of this trade arrangement?
2) Explain one possible social cost of this international transaction.
3) What if the ocean freight rates go up 4%
4) What if Canada signs a free trade agreement with Australia?
5) What if the value of the Canadian dollar goes down 5% compared to the Australian dollar?
6)What if Australia has a drought, and the raspberry crop is harmed?
I really need answeres asap..thank you
1) Both you and the manufacturer make a profit.
2) A social cost would be that this import takes business away from Canadian jam manufactuerers.
What do you think the answers are for the next four questions?
We'll be glad to comment on your answers.
1) The price of jam will go up, because now it costs more to ship the product. How would u actually calculate this?
2) The cost of jam is going to go down, because now it is free to ship it from Australia to Canada.
3) I am not sure on this one..
4) No producing of jam, no selling of jam. So, the manufacturer will go bankrot, so would you.
If it costs 4% more to ship the product, then you'd pass this additional expense on to the customers.
4% * $5.00 = $0.20
A free trade agreement does not mean that the cost of shipping is free. It means that small or no tariffs are charged for imports.
i need as much help as i can get but right now i'm living at my grandmas so it can't cost and theres so many things in life right now that i can't focas.