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3 years ago

Why does an oligopoly only work if there are high barriers to entry in a market?

1 answer:

4 0

An oligopoly is the limitation of competition. If you can keep competitors out of the marketplace, you have more of a chance to make a profit. If you are in a business with a very high capital outlay or you have an extremely well trained labor force that your competitors can't match then you have effectively created or have created for you a very high barrier. Hence an oligopoly.

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dar Grove Industries produces and sells a cell phone-operated home security control. Information regarding the costs and sales o

Neporo4naja [7]

Answer:

.................................................................................................

Particulars Unit cost Amount

Sales income $ 47 $ 376,000

Less: Variable cost $ 24 $ 192,000

---------------------------------------------------------------------------

Contribution Margin $ 13 $ 184,000

Less: Fixed cost $ 124,000

---------------------------------------------------------------------------

Net income $ 60,000

...................................................................................................

Explanation:

Given:

Unit selling price = $ 47

Variable cost = $ 24

Total monthly fixed cost = $ 124,000

Number of units sold = 8,000

CVP income statement for Cedar Grove Industries for the month of May is as:

.................................................................................................

Particulars Unit cost Amount

Sales income $ 47 $ 376,000

Less: Variable cost $ 24 $ 192,000

---------------------------------------------------------------------------

Contribution Margin $ 13 $ 184,000

Less: Fixed cost $ 124,000

---------------------------------------------------------------------------

Net income $ 60,000

...................................................................................................

here, the amount is for the total unit i.e 8000 units multiplied by the unit cost

8 0

3 years ago

James Perkins wants to have a million dollars at retirement, which is 15 years away. He already has $200,000 in an IRA earning 8

Lelu [443]

Solution :

Given :

James needs $ 1,000,000 after 15 years.

His IRA deposit is $ 200,000 and is earning at the rate of 8% per annum.

Maturity value of $200,000 after 15 years = $2000000 \times( 1.08)^{15}$

= $ 634,434.

Balance fund needed after 15 years = 1,000,000 - 634,434

= $ 365,566

Therefore, the future value of the annuity is :

$FV=A[\frac{(1+k)^n-1}{k}]$

Here, FV = future annuity value = 365,566

A = periodical investment

k = interest rate = 8%

n = period = 15 years

∴ $365566 = A\frac{[(1.08)^{15}-1]}{0.08}$

A = 13,464

Thus, James needs to save $ 13,464 each year end to reach his target.

4 0

3 years ago

Josefina is the only seller of sopapillas in town. Last week, she sold 200 sopapillas, and the marginal revenue of the 200th sop

Alex73 [517]

Answer:

Josefina is not maximizing her profits since she is making a loss of $0.25.

Explanation:

The marginal revenue is the total amount of revenue received from selling an additional unit of product while the marginal cost is the total cost incurred for producing an additional unit of product. The marginal cost and revenue can be compared to determine if producing and selling an additional unit is profitable or will cause a loss.

The profit/loss can be expressed as;

P/L=R-C

where;

P=profit

L=loss

R=total marginal revenue

C=total marginal cost

In our case;

P/L=unknown

R=marginal revenue per unit×number of units=1.50×1=$1.50

C=marginal cost per unit×number of units=$1.75×1=$1.75

replacing;

P/L=1.50-1.75=-$0.25

Since the marginal cost is greater than the marginal revenue, we can conclude that Josefina is making a loss of $0.25

7 0

3 years ago

During the latest month, the company purchased and used 47,000 pounds of direct materials at a price of $1.20 per pound to produ

Nataliya [291]

Answer:

$1400 U

Explanation:

Total direct materials cost variance = (47,000 actual pounds × $1.20 actual cost per pound) − (50,000 standard pounds × $1.10 per pound) = $1,400 unfavorable

5 0

3 years ago

While Sony and Microsoft focused on the graphics and raw processing power favored by hard-core male gamers, Nintendo chose to de

nirvana33 [79]

Answer:

While Sony and Microsoft focused on the graphics and raw processing power favored by hard-core male gamers, Nintendo chose to develop a machine to appeal to families, women, and age groups that normally shunned violent games.

The strategy adopted by Nintendo in this example is the _____ strategy.

C) blue ocean

Explanation:

Blue ocean is a strategy that says innovation, simultaneous pursuit, and low cost are key concepts to achieve a successful business and establish an advantage in the market. It is a very proactive system that allows the constant improvement, elimination, reduction, and creation of corporate actions. It is a global and general perspective that allows the management team to know the state of the company at any time.

4 0

3 years ago