Answer:
1a. $500
1b. $250
2. The market for sunscreen is efficient because total surplus is maximum.
<em>Diagram in question attached</em>
Explanation:
1a. Consumer surplus is the difference between the maximum price that consumers are willing to pay and the price actually paid. This is the triangular area above the market equilibrium. In the market for sunscreen, consumers are willing to pay $20 for sunscreen but are actually only paying $10 (equilibrium price).
The formula for consumer surplus = 1/2 x (Qd at equilibrium) x (price willing to pay - price at equilibrium)
<em>Note that consumer surplus is a triangle and the area of it is being found, hence the 1/2 :)</em>
Consumer surplus = 1/2 x 100 x ($20 - $10)
1/2 x 100 x $10 = $500
1b. Producer surplus is the difference between the price producers receive and the minimum price they are willing to accept. This is the triangular area below the market equilibrium. In the market for sunscreen, suppliers are willing to produce at $5 but are actually receiving $10 (equilibrium price).
The formula for producer surplus = 1/2 x (Qs at equilibrium) x (price at equilibrium - price willing to receive)
Producer surplus = 1/2 x 100 x ($10 - $5)
1/2 x 100 x $5 = $250
2. The market for sunscreen is efficient because total surplus is maximum. Total surplus is maximized when the market is producing at the equilibrium price as in the current sunscreen market. At any other price, consumer or producer surplus would be reduced and a dead weight loss would be incurred.
The oligopoly is known to have a one producer dominating the market. This results in a few suppliers/sellers in the market, and thus can cause a high increase in the price of the products that are being sold in its respective community.
Answer:
The two types of market structure, monopoly, and monopolistic competition, generate essentially the same two types of market inefficiency:
Charging prices higher than marginal cost, meaning that consumers pay a higher price than they would otherwise in a perfectly competitive market.
Producing a smaller amount of output that in a perfectly competitive market.
The difference is in the degree of the inefficiency: monopolies are more market inefficient, and cause more harm to consumers, while monopolistic competition is a less inefficient market structure, and only causes marginal harm to consumers when compared to the hypothetical results of a perfectly competitive market structure.
Answer:
2 years
Explanation:
Payback period is the length of time it takes for the future cash flows to equal the initial investment.
$224,000 = $112,000 + $112,000
therefore,
It takes 2 years for the cashflows to equal initial investment
Answer:
Bank will hold Mary accountable supported the deceitful use of the cardboard is $500
Note: Bank can’t make Mary answerable for the complete stolen amount from her ATM, as she conversant the bank at intervals every week when the cardboard was stolen, during these circumstance if the bank is informed about the stolen ATM directly the client is accountable for $50 in losses, whereas if they inform when three days quantity raise to $500 in losses.