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?

Could Someone please help me? What does it mean by a 10% cost over run being dumped in Canada? Thanks a lot.

To understand what it means for a cost overrun of 10% to be "dumped" in Canada, we need to first understand the context of the situation provided.

In the given scenario, there is a larger population in the United States than in Canada. This implies that any costs incurred by a company operating in both countries can be spread over a larger number of units in the US, which could potentially help mitigate the impact of cost overruns. However, in this case, it is stated that the 10% cost overrun could be "dumped" in Canada.

What this means is that if the company experiences a cost overrun (where the actual cost of a project or operation exceeds the planned or budgeted cost), instead of absorbing or adjusting the cost within the US operations, the company could pass on or allocate a portion of the overrun to the Canadian operations.

This might be done by increasing prices for Canadian customers, reducing investments or expenditures in Canada, or finding other ways to shift the burden of the cost overrun onto the Canadian operations.

As a result, the Canadian company would likely be negatively affected by this situation. If the cost overrun is dumped onto the Canadian operations, it could lead to financial challenges, reduced profitability, or potential job losses for employees working for that company in Canada.

As for the impact on your specific job, if you work for the Canadian company, it would depend on the severity of the cost overrun and the actions taken by the company. In such cases, companies may resort to cost-cutting measures, including layoffs, to mitigate the financial impact. However, it's important to note that the exact outcome would depend on various factors, including the company's overall financial health, management decisions, and market conditions.