Most people criticize monopolies for charging excessive prices, but economists disagree because monopolies do not produce enough goods and services to be allocatively efficient.
What is Allocative efficiency?
Efficiency, whether allocational or allocative, is the quality of a market where all products and services are efficiently divided among consumers in an economy. It happens when parties can use the precise and easily accessible information reflected in the market to decide how to employ their resources.
Why is a monopoly allocatively inefficient?
Companies with monopoly power can set prices higher than in a market with competitors. Because in monopolies the price is higher than MC, an unregulated monopoly provider is very likely to be allocatively inefficient. In a market where there is competition, prices would be reduced and more people would benefit from buying the product.
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<span>It will increase their finished goods inventory and hopefully increase revenue.
When coleman managed to double its production process, a number of sales that he'll manage to do will be more likely to increase.
Which means that the amount of profit that he'll have will be most likely to increase.</span>
Answer:
$38,100
Explanation:
For avoidable cost, they are example of relevant cost. When a decision is taken , some costs are incurred in connection with such decision, they are known as avoidable cost.
The direct costs associated with a decision to produce are avoidable costs, which entails that such costs will not be incurred should Tangier company decides not to produce.
Therefore, the avoidable cost of Tangier is
= Raw materials cost + Direct labor cost
= $29,500 + $8,600
= $38,100
More accurate estimates and higher motivation are generally the results of using a(n) participative budget.
What is meant by participative budgeting?
In a budgeting procedure called participatory budgeting, those in lower levels of management take part in the creation of the budget.
What are the benefits of participative budgeting?
Participatory budgeting undoubtedly provides a number of benefits, including goal congruence, fiscal responsibility, information sharing from inferior to superior, and greater subordinate work satisfaction.
Is participatory budgeting effective?
The highest-ranking engagement strategy on the participation rung is participatory budgeting because of this. Although it necessitates thorough planning and preparation, it also strengthens the legitimacy of your decision-making and the level of confidence that the community's residents have in their elected officials.
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Answer:
Antonio and Replacement of Golf Clubs
a. He should cash the CD and use the proceeds to finance part of the golf clubs.
b. The reason is that he would pay more in in-store financing totaling $37.06 per annum than the net interest he would generate from the CD totaling $23.18 per annum. And Antonio would incur a net loss of $13.88 if the CD was renewed unlike the $5.74 if the CD were not renewed.
Explanation:
Option 1: Renew Certificate of Deposit (CD):
Interest earned = $33.48 ($600 * 5.58%)
Taxes = 10.30 ($33.48 * 30.75%)
Net Income = $23.18
Cost of in-store financing = $37.06 ($710 * 5.22%)
Net Loss(overall) = $13.88 ($37.06 - $23.18)
Option 2:
Sale-off of CD = $600
Net financing required = $110 ($710 - $600)
Cost of financing = $5.74 ($110 * 5.22%)
