Question 8
3 pts
By manufacturing and selling an anti-itch cream that depends crucially on an ingredient, machiello root, that grows predominantly
in China, you earn $80,000 in yearly profit. This is exactly as much as you could earn in any alternative profession for which you're
suited. If trade relations between the United States and China break down, constraining the supply of machiello root and raising
your variable costs, then, rationally, you should:
continue producing at the same level.
increase output.
either exit or remain in the market, depending on how much your variable costs rise.
exit the market
