Torushka is a profit maximizing firm producing wooden dolls, which it can produce and sell in its home country, Russia, and abroad in France. Theaverage cost (AC) curve on the following graph represents Igrushka's cost of producing wooden dolls within one factory, whether in Russia or inFrance.COST (Dollars per wooden doll)1090D1020 30 40 50 60 7080QUANTITY (Thousands of wooden dolls)AC90 100?← Suppose that at the current market price of wooden dolls, the demand for Igrushka's product is 20,000 wooden dolls per year in Russia and 10,000wooden dolls per year in France. (Hint: Select each point on the previous graph to see its coordinates.)Based on Igrushka's average cost curve, within one factory it can produce 10,000 wooden dolls atwooden dolls atper wooden doll, and produce the total of 30,000 wooden dolls at SComplete the following table by indicating Igrushka's total production cost for each scenario.ScenarioProduce 20,000 wooden dolls in Russia and 10,000 wooden dolls in France.Produce 30,000 wooden dolls at the same factory.Total Production Cost(Dollars)per wooden doll, produce 20,000per wooden doll.Now suppose that if Igrushka produces wooden dolls in one country and sells them in the other, it incurs an additional shipping cost equal to $3.00 pertransported wooden doll.If Igrushka produces 30,000 wooden dolls in Russia and transports 10,000 of them to France, its total cost of production and shipping isIf Igrushka produces 30,000 wooden dolls in France and transports 20,000 of them to Russia, its total cost of production and shipping isBased on Igrushka's production and shipping costs determined in the previous questions, which of the following is Igrushka's best production strategy?O Produce 30,000 wooden dolls in France and ship 20,000 wooden dolls to Russia.duce 20,000 wooden dolls in Russia and 10,000 wooden dolls in France.O Produce 30,000 wooden dolls in Russia and ship 10,000 wooden dolls to France.O Produce 30,000 wooden dolls in either Russia or France.Save & Continue4

The best production strategy is a strategy that minimizes the overall average cost of production.…

lorushka is a profit maximizing firm producing wooden dolls, which it can produce and sell in its home country, Russia, and abroad in France. The average cost (AC) curve on the following graph represents Igrushka's cost of producing wooden dolls within one factory, whether in Russia or in France. COST (Dollars per wooden doll) D D 1 1 I I II 1 II 1 10 20 30 40 50 60 70 80 QUANTITY (Thousands of wooden dolls) AC 90 100 ?