Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Homegrown profits have enabled Cemex to afford acquisitions such as the $2.8 billion purch

Homegrown profits have enabled Cemex to afford acquisitions such as the $2.8 billion purch

Homegrown profits have enabled Cemex to afford acquisitions such as the $2.8 billion purchase in 2000 of U.S. cement company Southdown Inc. That move made Cemex the leading seller of cement in the more competitive American market, where it has a 14% share.


U.S. rivals accuse Cemex of unfairly using its dominance in Mexico to finance its expansion and cut prices north of the border. Responding to these complaints, the U.S. since 1990 has imposed "anti-dumping" duties on cement imported from Mexico. The duties are adjusted annually and in some years have amounted to more than 100% for Cemex. The company denies improperly slashing prices in the U.S. and actively lobbies against the duties in Washington. Despite the trade struggle, Mr. Zambrano attended President George W. Bush's first White House state dinner, which honored President Fox in September 2001.

Cement in the U.S. is generally sold in bulk, so the only way to compare prices across the border is on a per-tonbasis. A ton in the U.S. costs about $82, compared with $160 in Mexico. Production costs in Mexico are $25 a ton, about $10 less than in the U.S.

When we use the markup percentage formula:

Could you please explain why the U.S demand is higher than Mexico's?

P(Q) – MCQ) MC(Q) 1 1 +ED MEXICO UNITED STATES 160 – 25 25 1 1+ Ed 82 – 35 1 1 5.4 = 1+Ed 1.34285 = - 1 1 + Ed 1 1 + Ed = - 1 + Ed = - 1 1.34285 5.4 -0.185 = 1+ Ed -0.77468 = 1+ Ed Ed = -1.1848 Ed = -1.744684

Jan 07 2020 View more View Less

Answer (UnSolved)

question Get Solution

Related Questions