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
Answer:
The correct answer is letter "B": property rights must be clearly assigned to the parties involved in the dispute.
Explanation:
Named after British lawyer and economist Ronald Coase (<em>1910-2013</em>) the Coase Theorem states when there are competitive markets and no transaction costs bargaining will lead to an efficient and mutually beneficial outcome. The theorem affirms that when property rights are defined and divided, parties will gravitate to the most efficient and beneficial outcome.
Answer:
d. $96,914
Explanation:
Parker Co. can execute money market hedge in following steps:
(1) Parker Co. pledges Receivable of SF200,000 to borrow SF190,476 with rate 5% in Switzerland; SF190,476 = SF200,000/ (1+5%)
so it has to pay interest expense of SF9,524 in 360 days. The receivable of SF200,000 is enough for both principal and interest in 360 days.
(2) Then it sells SF190,476 at spot rate $0.48 to get $91,428
(3) Then it deposits $91,428 in US with rate 6% to get back $96,914 in 360 days
; $96,914 = $91,428 * (1+6%)
