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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Answer:
To earn $1,150 the order should be 900 units.
Explanation:
Giving the following information:
Selling price= $12
Unitary variable cost= $10
Incremental fixed costs= $650
Desired profit= $1,150
<u>Because it is a special order, and there is unused capacity (1,000 units), we will take into account only the incremental fixed costs.</u>
<u>To calculate the number of units to be sold, we can use the break-even point formula with the desired profit:</u>
<u></u>
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (650 + 1,150) / 2
Break-even point in units= 900 units
To earn $1,150 the order should be 900 units.
Answer:
<em>C) Organizational plurality
</em>
Explanation:
Organizational plurality is a working environment in which all representatives are encouraged to collaborate in a way that promotes the gains for the company, clients and themselves.
As with the advertising agency, the employees are given chances to follow their decisions and maximize their experience.
Answer:
Yes
Explanation:
<em>Depreciation can summarily be defined as spreading the cost of a tangible item over the course of the through which the item would be useful.</em>
When an item such as office furniture, electronics, etc., is purchased, the lifespan of the item is estimated and the cost is spread over the period of its lifespan. At the end of each financial period, the cost of the item for the period is removed from the value of the item and the new value is input into the balance sheet.
Correct answer: yes.
Answer:
Dr Retained Earnings 500,000
Cr Com. Stock Dividend Distributable 100,000
Cr Add’l Paid – in Capital, Com. Stock 400,,000
Explanation:
Preparation of the journal entry
Dec. 31
Dr Retained Earnings 500,000
[(100,000 x (50/100)* 10 market price]
Cr Com. Stock Dividend Distributable 100,000
[(100,000 x (50/100)*2 par value ]
Cr Add’l Paid – in Capital, Com. Stock 400,,000
(500,000 – 100,000 )
