XYZ, Inc Plans to Purchase 460 Units of a Certain Component

question 56

Short Answer

XYZ, Inc. plans to purchase 460 units of a certain component used in building computers in their U.S. factory. XYZ, Inc. can purchase the components from country A at a price of $42 each plus an ad valorem duty of 42%, from country B at a price of $54 each plus an ad valorem duty of 2%, or from a domestic manufacturer at a price of $51 each. They take the lowest bid. Compute the amount the 460 units will cost XYZ, Inc.​

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Definitions:

Incidence

The allocation of the burden of a tax between buyers and sellers, or the effect of a policy or economic event on particular groups.

Industrial Market Countries

Nations with highly developed industries where the majority of economic activities are focused on manufacturing and services.

High-Income Economies

Countries or regions characterized by a high gross domestic product (GDP) per capita, indicating a higher standard of living and economic development.

Inefficient Use

Inefficient use describes a scenario in which resources, such as time, money, or materials, are not utilized in a way that maximizes productivity or value.