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andreev551 [17]
2 years ago
6

A firm sells a product in a purely competitive market. The marginal cost of the product at the current output is $5.00 and the m

arket price is $5.00. What should the firm do
Business
1 answer:
Rufina [12.5K]2 years ago
5 0
  • Shut down, if the minimum possible average variable cost is $5

In the purely competitive market majority of the producers is price taker as there are many sellers of the same homogenous product. When in the situation of Marginal Cost (MC) of product at the current rate of production is equal to the market price. This shows that the firm isn’t in profit, it is selling at which they are producing. So, the Average Variable Cost AVC of product at this level indicates the shutdown of the firm production.

For the questions related to the competitive Market visit the link:

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If fixed costs are $750,000 and variable costs are 60% of sales, what is the break-even point in sales dollars?
nlexa [21]

Answer:

$1,875,000

Explanation:

Break even point in sales = Fixed cost / Contribution margin ratio

When Contribution margin ratio = 100% - Variable cost ratio

Contribution margin ratio = 100% - 60%

Contribution margin ratio = 40%

Break even point in sales = $750,000 / 40%

= $1,875,000

4 0
3 years ago
Several European countries spend less time working and more time on leisure activities than the United States. How is this great
Crank

Answer:

The value of Leisure time is not included in GDP.

Explanation:

Gross domestic product or GDP includes the value of final goods and services produced in an economy in a year. It does not include the value of intermediate goods to prevent double counting. It also does not include the value of second-hand goods.  

The value of pollution, crime, leisure, etc. are also not included as they are difficult to express in monetary terms.

3 0
3 years ago
you have been offered a job that pays an annual salary of $48,000, $51,000, and $55,000 over the next three years, respectively.
jeka94

You are thinking about a project that is anticipated to bring in $138,066.75 annually.

<h3>How do you calculate the cash flow from an annuity?</h3>

The periodic cost of capital When the cost of capital is constant across all maturities, an AFs is the sum of the DFs for each cash flow in the annuity.

<h3>A stream of cash flows is what?</h3>

A sequence of equal-amount cash flows that occur at predictable, periodic times. When determining the comparable future value of a present amount of liquidity, the effect of time on value or the rate at which time affects value is taken into account a series of regular financial flows that never ends an infinite annuity.

To know more about Annuity visit:-

brainly.com/question/23554766

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5 0
1 year ago
Wht is yall favorite subject
Rufina [12.5K]

Answer:

My favourite subject is Arthematic of maths

please mark me brainliest

7 0
3 years ago
Read 2 more answers
Appropriation to retained earning is
jenyasd209 [6]
Are the sum of a company's profits, after dividendpayments, since the company's inception. They are also called earned surplus, retained capital, or accumulated earnings.

(EXAMPLE):

Let's assume Company XYZ has been around for five years. During this time, it reported the following net income:

Year 1: $10,000
Year 2: $5,000
Year 3: -$5,000
Year 4: $1,000
Year 5: -$3,000

Assuming Company XYZ paid no dividends during this time, XYZ's retained earnings equal the sum of its net profits since inception, or in this case, $8,000. In subsequent years, XYZ's retained earnings will change by the amount of each year's net income, less dividends.

The retained earnings statement summarizes changes in retained earnings for a fiscal period, and total retained earnings appear in the shareholders' equity portion of thebalance sheet. This means that every dollar of retained earnings means another dollar of shareholders' equity ornet worth.

A company's board of directors may apprompany's retained earnings when it want to restrict dividend distributions to shareholders. Appropriations are usually done at the board's discretion, although bondholders and other circumstances may contractually require the board to do so. Appropriations appear as a special account in the retained earnings section. When an appropriation is no longer needed, it is transferred back to retained earnings. Because retained earnings are not cash, a company mayfund appropriations by setting aside cash or marketable securities for the projects indicated in the appropriation.

Why its important

It is important to understand that retained earnings do not represent surplus cash or cash left over after the payment of dividends. Rather, retained earnings demonstrate what a company did with its profits.

3 0
4 years ago
Read 2 more answers
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