posted by David .
Given the larger population runs in The States than in Canada, the costs are spread over more units. In fact in The States a cost over run of 10% could be dumped in Canada. Given the law of demand, what would happen to the Canadian company? If you worked for that company, what would happen to your job?
Okay, so I get what cost overrun is. I assume when this occurs, a company would charge Canadians more to stay on budget. Does this mean that a Canadian business would be more successful because their prices would be low? What would happens to jobs in this company? Thanks for your help.
Economics is not my field but I know it depends upon supply and demand. If the US manaufacturers more than it can sell, they would have more inventory than they would either want or need.
The Canadian company would have to purchase material they wouldn't otherwise need and perhaps hire more people to produce the item. That doesn't seem advantageous to them unless they can find a market.