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DedPeter [7]
2 years ago
6

In the short run, average total costs and average variable costs converge as output increases because:________

Business
1 answer:
slava [35]2 years ago
8 0

Average fixed costs continually decrease is the correct answer. The average costs assist in identifying the costs related to producing a single unit, whereas the total cost of production aids businesses in understanding the entire expenses incurred.  

The total fixed cost is divided by the quantity of units produced to get the average fixed cost. The fixed cost incurred in producing a unit of output is known as the average fixed cost.

Any increase in output reduces the average fixed cost because Total Fixed Cost is constant. Though the average fixed cost can go very small, it will always exist.

To learn more about average fixed cost, click here

brainly.com/question/17100497

#SPJ4

You might be interested in
Based on the sticky-price model, the short-run aggregate supply curve will be steeper the greater the:
Ket [755]

Answer:

The correct answer will be the "proportion of firms with flexible prices".

Explanation:

  • The sticky market or price mechanism induces on the upward steep slopes quantity supplied for the immediate term cumulative. That was because firms reacting to changes and differences in economic conditions are restrictive in fluctuating prices.
  • We addressed the explanations or causes behind the strength and stiffness throughout this section.

So that the above is the correct solution.

3 0
3 years ago
The following balances are available for Chrisman Company:
kenny6666 [7]

Answer:

Chrisman Company

Statement of Cash Flows for the year ended December 31, 2016

(using the indirect method):

Operating activities:

Adjusted cash from operations      $61,000

Changes in working capital:

Accounts receivable                         -5,000

Inventory                                           10,000    

Prepaid rent                                      -3,000

Accounts payable                              2,000

Income taxes payable                      -2,000

Short-term notes payable               10,000

Net cash from operating activities 73,000

Investing activities:

Equipment                                    -100,000

Financing activities:

Bonds                         -25,000

Common stock           50,000      25,000

Net cash flows                             -$2,000

Explanation:

a) Data and Calculations:

                                            December 31     December 31     Changes

                                                  2016                2015

Cash                                        $8,000            $10,000             -$2,000

Accounts receivable              20,000               15,000                5,000

Inventory                                 15,000              25,000              -10,000

Prepaid rent                             9,000                 6,000                3,000

Land                                       75,000               75,000                0

Plant and equipment          400,000            300,000             100,000

Accumulated depreciation (65,000)             (30,000)              35,000

Totals                               $462,000            $401,000    

Accounts payable              $12,000              $10,000              $2,000

Income taxes payable           3,000                 5,000                -2,000

Short-term notes payable  35,000               25,000                10,000

Bonds payable                    75,000              100,000             -25,000

Common stock                200,000               150,000              50,000

Retained earnings            137,000                 111,000              26,000

Totals                             $462,000             $401,000

b) Net income $26,000

Depreciation 35,000

Adjusted cash from operations = $61,000

c) The statement of cash flows can be prepared using either the direct method or the indirect method.  The indirect method affects mainly the operating activities section and starts with the net income and adjusts it with non-cash items before considering the changes in the working capital.  The statement is a financial statement that classifies the cash flows during the period into three main categories: operating, investing, and financing activities.  There are also non-cash flows involving accounts that do not cause any cash flows.

4 0
2 years ago
In Year 1, in a project to develop Product X, Lincoln Company incurred research and development costs totaling $10 million. Linc
snow_lady [41]

Answer:

Answer is explained in the explanation section below.

Explanation:

Data Given:

Research and Development Cost = $10 million

Research Phase Cost = $6 million

Development Cost = $4 million

Total Sales of Product X are estimated at more than = $100 million

Solution:

a.

1. IFRS:

Research cost of $6 million have been expensed in year 1 in case of IFRS.

Whereas, for year 2 developmental cost is reported as assets and amortization is recorded on the asset which is the 5th part of the developmental cost of $4 million.

$4,000,000/5 = $800,000

2. U.S. GAAP:

Under U.S. GAAP in year 1, total of $10 million have been expensed including both research and development cost.

Under U.S. GAAP in year 2, however, there is no asset reported and all the costs are expensed in year 1 hence, no impact on the income statement.

b.

Income: In year 1 under IFRS, income will be higher by $4 million ($10-$6)million before the implication of tax.

But for year 2 to year 5:

In case of IFRS, income will be lowered due to the amortization on the deferred development cost. It will decrease by $800,000.

The total assets and stock holder's equity under IFRS will be higher by the following amounts each of the years.

Year 1  $4,000,000

Year 2 $3,200,000

Year 3 $2,400,000

Year 4 $1,600,000

Year 5 $800,000

The above amount is decreased by $800,000 each year because of the amortization of asset.

5 0
3 years ago
Give examples of three cash crops that were grown in latin america and explain why they were cash crops.
fgiga [73]
<span>Coffee/ sugar cane / bananas can grow on a small farm, lower startup costs and risks. Countries clear cut natural forests and wildlife to make room for these crops. without export, they cannot sustain the country.</span>
3 0
3 years ago
Due to a downturn the wage of entry level workers has declined by 10 per cent, as a
lilavasa [31]

The cross elasticity of demand for senior workers is 1.5. Senior workers and entry-level workers are gross complements.

The scale effect dominates in this example.

If the wage of the entry level workers increase, the demand curve would shift to the right.

<h3>What is the crosss price elasticity?</h3>

Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B.

Cross price elasticity = 15% / 10 = 1.5

Complement goods are goods or resources that are used together. As a result of the decline in wages, senior workers would be laid off. This means that senior workers and entry level workers work together.

<h3>What is the effect on the demand curve if the wages of entry level workers increase?</h3>

If the wage of the entry level workers increase, the demand for senior workers wouuld increase. This would lead to a shift to the right of the demand curve for senior workers.

To learn more about cross price elasticity, please check: brainly.com/question/26054575

8 0
2 years ago
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