Final answer:
Factors affecting mobile phone production and prices include changes in the cost of inputs, natural disasters, new technologies, and government decisions. These factors impact production costs and supply, leading to price fluctuations. For trade between two countries, the minimum price must cover production costs to be profitable.
Step-by-step explanation:
Fluctuations in the production output and prices of mobile phones can be attributed to several factors. Firstly, changes in the cost of inputs, such as the materials or labor used in manufacturing mobile phones, can make production either more or less expensive. This variation can lead to changes in supply, impacting output and potentially prices as companies adjust.
Natural events or disasters also play a significant role, as they can disrupt supply chains, damage manufacturing facilities, or affect the availability of raw materials, subsequently influencing production levels and prices.
Introducing new technologies can lead to more efficient production processes or the development of new features, which can affect mobile phone output and pricing. Finally, government decisions or policies regarding taxes, trade tariffs, or regulations can change the cost of production and supply, influencing market prices and production decisions of firms.
To understand the minimum price at which South Korea and Taiwan will engage in trade for mobile phones, we need to consider production costs and potential profits. South Korea produces phones at $5 each, while Taiwan's cost is $10 per phone. The minimum trade price must be higher than the production cost for both; therefore, it would have to be higher than $10 for both countries to profit from trade.