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3 years ago

Why does price discrimination improve the efficiency of the market compared to monopoly or monopolistic competition?

1 answer:

6 0

Why does price discrimination improve the efficiency of the market compared to monopoly or monopolistic competition? P<span>erfect price discrimination allows us to be at a point where MC = D. Monopolistic competition equals demand for the product in the equation above. Because price discrimination relates to the price of an item changing based on the demand for it, it is ideal for demand to align with the market competition.
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Assume the Runnng Shoes division of the Shoes Corporation had the following results last year (in thousands). Management's targe

vivado [14]

Answer: 180%

Explanation:

Return on investment = (operating income/sales) x (sales/total assets)

=> operating income / total assets

given Operating income=1,800,000

Total assets.1,000,000

Current liabilities.=810,000

Return on investment=1,800,000/1,000,00=1.8 X 100= 180%

4 0

3 years ago

How supply and demand work together to reach the equilibrium price in the marketplace? Please give at least a paragraph. Thank y

grandymaker [24]

Answer

Before I answer this question, you must note that the equilibrium price is created by both the amount supplied of a certain product as well as how much "customers" there are (or the amount that is bought in all). This however, is usually not taking account any potential competitors.

For example, let say that the price in creating the product (or buying) is $15. This means that right now, the company loses $15 for one of the products. To make a profit, the selling price must be >$15. However, (unless they are a monopoly, such as, for example, electrical companies) there are competitors that they must fight with to get customers. Of course, there are other things that can affect the price, depending on the demographic and area.

So how does supply and demand affect the equilibrium price? The limits of the supply & the amount of demand would help determine the price by the amount of people buying and the supply of the product.

6 0

3 years ago

Read 2 more answers

Gomez runs a small pottery firm. He hires one helper at $14,500 per year, pays annual rent of $7,500 for his shop, and spends $1

uysha [10]

Answer:

a). Accounting profits=$6,000

b). Economic profit=-$6,000

Explanation:

a). The accounting profits for Gomez's pottery firm can be expressed in the form;

Accounting profits-Total monetary revenue-Total monetary expenses

where;

Total monetary revenue=$86,000

Total monetary expenses=excludes opportunity cost=wages+rent+materials+equipment=(14,500+7,500+18,000+40,000)=$80,000

replacing;

Accounting profits=(86,000-80,000)=$6,000

Accounting profits=$6,000

b). Gomez's economic profit

Economic profit=Total revenue-total costs

where;

Total revenue=(86,000+5,000+6,000)=97,000

Total costs includes opportunity cost=(80,000+23,000)=103,000

replacing;

Economic profit=(97,000-103,000)=-$6,000

Economic profit=-$6,000

6 0

3 years ago

In its first month of operations, Marigold Corp. made three purchases of merchandise in the following sequence: (1) 240 units at

trapecia [35]

Answer:

A= $1120

Explanation:

6 0

3 years ago

Josh’s Manufacturing Company reported fixed manufacturing overhead of $2,500,000, and 2,600,000 total units. The variable manufa

sleet_krkn [62]

Answer:

$0.54

Explanation:

Given: Fixed manufacturing overhead = $2500000.

Total number of unit= 2600000.

The variable manufacturing costs= $1.50 per unit.

First finding the cost per unit of manufacturing overhead.

Cost per unit of manufacturing overhead= $\frac{Fixed\ manufacturing\ overhead}{Total\ number\ of\ units}$

⇒ Cost per unit of manufacturing overhead= $\frac{2500000}{2600000}$

∴ Cost per unit of manufacturing overhead= $0.96154

Next finding the cost per units using absorption costing.

Cost per unit= $Per\ unit\ variable\ manufacturing\ cost - Per\ unit\ cost\ of\ fixed\ manufacturing\ overhead$ ⇒ Cost per unit= $\$ 1.50 -\$ 0.96154$

∴ Cost per unit= $0.5384 \approx \$0.54$

Hence, $0.54 is the cost per unit using absorption costing.

4 0

3 years ago