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RUDIKE [14]
3 years ago
12

Compare and contrast the potential for a perfectly competitive firm and a monopolistically competitive firm to earn positive eco

nomic profits in the short run versus the long run. Explain your reasoning.
Business
1 answer:
Kazeer [188]3 years ago
3 0

Explanation:

There are no deficits or surpluses in terms of output, no obstacles to the entry or exit of businesses on the market, and the number of customers is so high that it is only the economic demand that decides the value of the products in the market. Thus, the reality is that the market is completely open. All producers earn normal profit and both manufacturers and consumers accept the commodity price.

In comparison, a monopoly market competition can be defined as a business environment where one entity or group of companies dominates the supply market and thus controls output factors. In this case, the monopolist decides the price of the goods on the market, as the competition is always strong. Free entry or departure from companies is not allowed in a monopolistic competitive market.

The short-term and long-term production or profitability are the same in the case of a fully competitive market. Since the production factors are often under control and fully meet the demand and supply of the market. In the shorter term and that in the long run, a perfect competition business will see stable and strong economic growth. In the case of a business or corporation which is fully competitive, there is no distinction between the competitors ' profit margins and all companies have the same rate of profit.

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The comparative balance sheets for Kingbird Corporation appear below:
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On January 1, 2019, Shay Company issues $400,000 of 10%, 12-year bonds. The bonds sell for $391,000. Six years later, on January
noname [10]

Answer:

$9,000

Explanation:

The computation of the  amount of the discount on the bonds at issuance is shown below:

= Par value of the bond - issued price of the bond

= $400,000 - $391,000

= $9,000

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4 0
3 years ago
Hunt Incorporated sold $209,000 of accounts receivable to Gannon Factors Inc. on a with recourse basis. Gannon assesses a 2% fin
pentagon [3]

Answer:

Dr Cash $190,190

Dr Due from Gannon Factors $14,630

Dr Loss on Sale of Receivables $16,280

Cr Accounts Receivable $209,000

Cr Recourse Liability $12,100

Dr Accounts Receivables $209,000

Cr Due to Customer $14,630

Cr Interest Revenue $4,180

Cr Cash $190,190

Explanation:

Journal entries

Dr Cash $190,190

Dr Due from Gannon Factors $14,630

Dr Loss on Sale of Receivables $16,280

Cr Accounts Receivable $209,000

Cr Recourse Liability $12,100

Dr Accounts Receivables $209,000

Cr Due to Customer $14,630

Cr Interest Revenue $4,180

Cr Cash $190,190

*7% X $209,000 =$14,630

*2% X $209,000 =$4,180+$12,100=$16,280

5 0
3 years ago
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