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worty [1.4K]
1 year ago
7

Does a competitive firm’s price equal its marginal cost in the short run, in the long run, or both? explain

Business
1 answer:
DerKrebs [107]1 year ago
5 0

The price of a firm is equal to its marginal cost in both the short and long run. In both the short and long run, price equals marginal revenue. Firms should increase output as long as marginal revenue exceeds marginal cost, and reduce output if marginal revenue is less than marginal cost.

Note that when we are in long-term equilibrium, we are also in short-term equilibrium. In the long run, P = min(ATC), and the entering firm chooses the set with the lowest ATC. The MC curve intersects ATC at min(ATC), so the same quantity has a price equal to MC.

For a perfect competitor, marginal return equals price and average return. This means that the firm's marginal cost curve is a continuous supply curve with values ​​greater than the average variable cost. If the price falls below the average variable cost, the company will be closed.

In a perfectly competitive market, price equals marginal cost in both the short and long run.

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Pound Industries’ customer service department follows up on customer complaints by telephone inquiry. During a recent period, th
goldfiish [28.3K]

Answer:

$85,260.

Explanation:

The Pound industries customer service department incurs $203,000 when 7,000 calls were made. The calls allocated to wholesale operations are 2,940 calls. To identify cost per call, we divide total cost by number of calls initiated.

Cost per call = $203,000 / 7000 calls

Cost per call = $29.

Wholesales operations cost = No. of calls for wholesale operation / Cost per call.

Wholesale operations cost = 2,940 calls * $29 / call

Wholesale operation cost allocated amount = $85,260.

6 0
3 years ago
Which of the following would violate the efficient market hypothesis?
jeyben [28]

The efficient market theory would be violated if investors earned extraordinary returns months after a company announced unexpected profits. Thus, the correct option is (d.) Investors earn abnormal returns months after a firm announces surprise earnings.

<h3>What exactly is the hypothesis of an efficient market?</h3>

The efficient-market hypothesis is a financial economics concept that asserts asset prices represent all available information. Because market prices should only react to fresh information, it is impossible to continually "beat the market" on a risk-adjusted basis.

Because the EMH is expressed in terms of risk adjustment, it can only offer testable predictions when combined with a specific risk model. As a result, financial economics research has focused on market anomalies, or departures from specified risk models, since at least the 1990s.

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brainly.com/question/28529377

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4 0
1 year ago
Pastoria Enterprises has scheduled raw material purchases of $100,000 in January, $130,000 in February, and $150,000 in March. T
IRINA_888 [86]

Answer:

B

Explanation:

The question asks to calculate how much will be disbursed by the company in February.

Firstly , we know that the company disburses 75% in the month of purchase and 25% during the month after purchase.

Now, 75% of $130,000 would be disbursed as February’s own payment:

Mathematically 75/100 * 130,000 = 97,500

Also, we should not forget that the company disburses 25% of previous month during the current. That is 25/100 * 100,000 = 25,000

Total amount disbursed is thus 25,000 + 97,500 = $122,500

6 0
3 years ago
Diversification means: a. allocating all your investment funds into one type of investment. b. allocating your investment funds
lubasha [3.4K]

Answer:

b. allocating your investment funds to several types of investments

Explanation:

Diversification means allocating your investment funds to several types of investments. To diversify means to shift away from the ordinary and normal investment to look into a new profitable one.

6 0
3 years ago
You spent $500 last week fixing the transmission in your car. Now, the brakes are acting up, and you are trying to decide whethe
svetoff [14.1K]

Answer: Sunk cost

Explanation:

Sunk cost also sometimes referred to as past cost is a cost that has already been spent by an individual or firm and cannot be recovered.

From the question, if $500 was spent last week in fixing the transmission in a car and the brakes are now acting up, and one has to decide qwhether to fix them or trade the car in for a newer model.

The amount spent on the brake situation in this case is a sunk cost as it has already been incurred and nothing can be done about it anymore.

8 0
3 years ago
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