Pure competition or perfect competition is where all firms have full knowledge of what is going on in the market, where there is free flow of information between not only the producers, but also with the consumers.
As such, all firms have no dominant share of market power since each individual firm is able to produce the good of the same quality and quantity (factors of production are fluid, and no costs in transportation in this theory). And at the same time, consumers have full knowledge of the quality of good they are getting and hence no firm will be able to exploit the misinformation of a good for its own profits.
This builds up to the point of a perfectly elastic demand curve, where consumers know what amount and at which price point do they value the product at. And knowing for the fact that small individual firms in a purely competitive firm have no say over prices, they become the price takers for this kind of market. Thus where MB=MC, the equilibrium point is reached and it is also at the socially optimal level since all consumers have full knowledge of the pros and cons of consuming a product (hence no externalities).
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Answer:
Morgan’s earnings per share for 2015 is $6
Explanation:
To compute the earning per share, we have to use the formula which is shown below:
Earning per share = (Net income - declaration of preference dividend) ÷ (Average common shares outstanding)
= ($600,000 - $60,000) ÷ (90,000 outstanding shares)
= $6
Common dividends declared is not considered. Hence, it is not taken in the computation part.
Answer:
Money Supply - Decreases / Interest Rates - Increase
Explanation:
Open market sells are contractionary monetary policy measures that aim are reducing inflationary pressures. The Federal reserves undertake monetary policy to achieve stable prices and steady economic growth.
Open market operations involve the Fed selling treasury bills to the banks and other financial institutions. The banks are expected to pay for the treasury bills using customers. Usually, banks issue out the customer deposits to firms, and households are loans. Open market sales results in banks unable to issue out many loans as most of the customer deposits are used to pay for the treasury bills. Banks will have limited cash for loans leading to a decrease in the money supply. Demand for loans exceeds supply resulting in an increase in interest rates.
Answer:
A)both countries would gain if Botswana traded wheat grown in Botswana for Qatar's wine.
Explanation:
The law of comparative advantage can be regarded as one set up by David Ricardo in the year 1817, which gives reason that is behind international trade that exist between different countries , even the business, workers as well as factories of a country have efficiency at production of every single good compare to other country.
Comparative advantage shows the ability of an economy have in production of a particular good/ service having lower opportunity cost compare to its trading partners.
Answer:
Find attached complete question:
Option A 1452 units
Explanation:
The increase in labor cost=$3.39-$2.89=$0.50
Half of the increase would reflect as increase in price i.e$0.25
Current price is $16
new price is $16+$0.25=$16.25
contribution margin =selling price -variable cost
currently units sold=$30,875/$16= 1,930
Current contribution per unit=$11,401/1930=$5.91
new contribution per unit would reduce by $0.25 i.e $5.91-$0.25=$5.66
breakeven in units=period cost/contribution margin per unit
period cost is $8346
breakeven units=$8346/$5.66=1475 units
The closest option is A 1452 units,the difference could be due to rounding error
