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1 year ago

If the industry were perfectly competitive the quantity of output produced would be?

1 answer:

3 0

If the graph represented a perfectly competitive industry, then the quantity of output produced would be 160 units.

<h3 /><h3>What is the quantity produced in a perfectly competitive industry?</h3>

Companies in any industry would try to maximize their profit by producing at a point where marginal revenue is the same as marginal cost.

This is the same in perfectly competitive industries like the ones shown in the graph.

The difference is that, in a perfect competition market, the demand curve is the same as the price which is also the same as the marginal revenue curve.

This means that the point of maximizing profit in a perfectly competitive industry is:

P = MR = MC

The point where the Marginal revenue curve intersects with the Marginal cost curve is 160 units as the marginal revenue curve is the demand curve.

In conclusion, the output would be 160 units.

Find out more on maximizing production at brainly.com/question/24860119

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The A. J. Croft Company (AJC) currently has $200,000 market value (and book value) of perpetual debt outstanding carrying a coup

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Answer:

current market value = $800000, WACC = 7.5%
new WACC = 7.38%, Total value of firm = $ 813,008.13
stock price per share = $62.00
4750 shares

Explanation:

1) Calculate AJC's current total market value and weighted average cost of capital

current market value = value of equity + value of debt

= ( 10000 * $60 ) + $200000

= $800000

Weighted average cost of capital = ( weight of equity * cost of equity ) + ( weight of debt * cost of debt * ( 1 - tax rate )

= (75% * 8.8% ) + (25% * 6% * 0.6 ) = 7.5%

2) what would be AJC's new WACC and total value

WACC = ( weight of equity * cost of equity ) + ( weight of debt * cost of debt * ( 1 - tax rate )

= ( 60% * 9.5% ) + ( 40% * 7% * 0.6 ) = 7.38%

Total value of the firm =

= ( Cash flow after tax / WACC )

= (( 100000 * ( 1-40%)) / 7.38%

= 100000 * 0.6 / 7.38% = $ 813,008.13

3) Calculate the new stock price per share

new stock price = ( value of equity + change in debt ) / original number of outstanding shares

value of equity = weight of equity * firm value

change in debt =( weight of debt * firm value ) - initial debt value

Hence new stock price =

( 50% *$820000) + (( 50% * $820000)- $200000)) / 10000

= $62.00

4) calculate how many shares AJC would repurchase in the recapitalization

= original shares - Remaining shares

= 10000 - 5250 = 4750 shares

while ;

Remaining shares = value of equity / stock price = $336000 / $64 = 5250

original shares = 10000

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3 years ago

Barclay Enterprises manufactures and sells three distinct styles of bicycles: the Youth model sells for $440 and has a unit cont

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Answer:

$21,370

Explanation:

A composite unit is a set of different products grouped together in proportion to their sales mix. The unit is a basis for grouping products from different segments of an entity together with the aim of managing inventory levels, break even points, and sales.

The selling price of the composite unit can be calculated as follows:

||Bicycle model |No. of bicycles |Unit selling price |Total per composite unit

|Youth models| 5 | 440 | 2,200

|Adult models| 9 | 990 | 8,910

|Recreational models| 6 | 1,140 | <u>10,260</u>

Selling price per composite unit <u>21,370</u>

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Answer:

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