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jeka94
3 years ago
10

A monopolist has the total cost function c(q) = 750 + 5q. The inverse demand function is 140 - 7q, where prices and costs are me

asured in dollars. If the firm is required by law to meet demand at a price equal to its maginal costs,a. the firm will make positive profit but not as much profit as it would make if it were allowed to choose its own price.b. the firm's profits will be zero.c. the firm will lose $375d. the firm will lose $750e. the firm will lose $450
Business
1 answer:
Ierofanga [76]3 years ago
4 0

Answer:

d. the firm will lose $750

Explanation:

marginal cost is the derivate of the cost function: It represent the cost of producting an additional unit

cost: 750 + 5q

dC/dQ = 5

We have determinate that marginal cost is $5 thus, we should price at the same value. The mistake from the goverment is to equalize marginal cost with price instead of marginal revenue.

This will make the firm loss the fixed component of the cost as will sale to pay up the variable cost.

The fixed cost is $750 so that is the loss from operations

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The answer to this question is "Moral Hazard". Hence I<span>f an individual and companies believe they can pursue rewards without facing the risks that should be attached to those pursuits, they are more likely to engage in irresponsible and even unethical behavior. this situation is known as a MORAL HAZARD. This is a belief of a company that they can pursue rewards without facing a problem or any issue.</span>
6 0
2 years ago
Differences in standards of living, credit, buying power, and income distribution are all examples of ____ forces that must be c
Vesnalui [34]

Answer:

The correct answer is

c. economic

good luck

8 0
3 years ago
3. Raymond decides to set up a lemonade stand every weekend for the next four weeks to save up for the latest X-Men comic. He ha
Vladimir [108]

Answer:

It should listen to his mother.

Explanation:

This week cash flow handled the fixed cost of 10 to Raymond's brother.

His father is not considering that so it thinks the business flops.

Now that fixed cost are paid the following weeks his gains will increase entirely based on the sales volume so, it is better to continue the business for the next three weeks.

6 0
3 years ago
MW Company manufactures down-filled comforters and uses an activity-based costing system. During the current period, the company
Scilla [17]

Answer:

MW Company

Activity rate for order process = $54,120/660

= $82 per order

Explanation:

a) Data and Calculations:

Production = 16,500 units

Direct labor = 19,800 hours

Machine hours = 21,450 hours

No. of orders = 660

No. of shipments = 165

Order-processing cost pool = $54,120

Shipping cost pool = $14,025

Assembly cost pool = $71,280

Activity rate for order process = $54,120/660

= $82 per order

b) MW Company uses an activity-based costing system to identify its activities into cost pools and assign the cost of each activity pool to the products and services according to their actual consumption of the activities.  The activity-based costing technique provides a more accurate method for determining the costs of products and services.  As a more accurate method for pricing decisions than other traditional methods, activity-based costing technique increases management's understanding of overheads and cost drivers and makes activities that are costly and non-value adding to become more visible, allowing managers to reduce or eliminate them, because these activities add costs to the production system.

3 0
3 years ago
In recent years, the trend among U.S. firms is to outsource the "production" of certain service activities to developing nations
Amiraneli [1.4K]

Answer:

TRUE

Explanation:

We currently live in a globalized world. Globalization is an economic and political phenomenon that has transformed the relations of production and labor. The companies started to produce in countries where the labor is cheaper, becoming consequently more competitive. Thus, US multinational companies outsource the manufacture of components of their products in different territories. For example, an Iphone has components made in China, Vietnam and others. This makes the final price of the iphone lower around the world.

5 0
2 years ago
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