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Sergio [31]
3 years ago
11

The pizza delivery industry is monopolistically competitive. Little Joe's Pizzeria raises its prices by 10%, but all the other p

izzerias in town keep their prices the same. Which of the following is most likely to occur?
a) Little Joe's Pizzeria will not be able to sell any pizzas, since it was the only firm to raise its price
b) Little Joe's Pizzeria profits will increase
c) Little Joe's Pizzeria will lose some of its customers
d) the number of customers served by Little Joe's Pizzeria will increase
Business
1 answer:
anygoal [31]3 years ago
4 0

Answer:

Option (C) is correct.

Explanation:

It was given that pizza industry is under the conditions of monopolistically competitive industry. The firms under monopolistic competitive industry are selling the similar products but these products are not perfect substitutes and the decision made by one firm do not affect directly the decision made by other firms in the industry.

Little Joe's raises the prices by 10%, so as a result demand for his pizza decreases because some of the individuals won't be able to afford that price. Hence, Little Joe's Pizzeria will lose some of its customers.

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Answer:

Explanation:

The company must record the acquisition of that inventory, including all the expenses related to the purchase and logistics, up to have them placed in the company´s warehouse.

Therefore, the journal entry to record those transactions are:

Dr  Inventory       8,200

Cr  Cash                              8,200

Notice that freight costs are not considered expenses in this case, as they are capitalized being part of the inventory cost.

<u>Income Statement</u>:  no change

<u>Balance Sheet</u>:   Inventory increased by $ 8,200

                            Cash decreased by $ 8,200

                            <u>Net change</u>:  $ 0

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Wally, Inc. issued 500 shares of $10 par preferred stock at $83 a share. Each share had a warrant attached that allowed the hold
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Explanation:

The journal entry will be:

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Note that Additional paid in capital on preferred stock was calculated as:

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Less: Preferred stock face value = $500 × $10 = $5000

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The correct answer to this open question is the following.

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