You can manufacture a product in the US and transfer it to Europe. If the marginal cost (MC) is $3 per unit, and the market price in Europe is $5 per unit, should the product be manufactured?
A. No, because the net receipt of $5 is larger than the MC in the US.
B. No, because the net receipt of $3 is the same as the MC in the US.
C. Yes, because the gross receipt of $3 is larger than the MC in the US.
D. Yes, because the net receipts in Europe will exceed the MC in the US.
Answer: D
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