Answer:
c. III only
Explanation:
The correct option is - c. III only
Reason -
III option is correct because The trade-off theory states that there is an optimal level of debt for firms, given the benefits of tax shields and the costs of financial distress
The effect that a drop in price will most likely have is increase the quantity demanded of goods.
If something becomes cheaper than it used to be, people are going to buy more of it because it is cheap now. Thus, the demand for that particular good will rise.
Answer:
Option (c) is correct.
Explanation:
Andy can produce 24 loaves of bread or 8 pounds of butter:
Opportunity cost of producing 1 pound of butter = (24 ÷ 8)
= 3 loaves of bread
John can produce 8 loaves of bread or 8 pounds of butter:
Opportunity cost of producing 1 pound of butter = (8 ÷ 8)
= 1 loaves of bread
Therefore,
John has a comparative advantage in producing butter because of lower opportunity cost.
Hence, the opportunity cost of producing 1 pound of butter is 3 loaves of bread for Andy and 1 loaves of bread for John.
Answer:
Give an example of a situation in which a surplus of a product led to decreased prices. similarity, give a example of a situation in which a shortage led to increased prices. what eventually happened in each case? why?
In the course of having surplus of a product which decreases the price, this happens as a result of high competition as there many people selling the same products which in turns leads to crash in price in order to make sales and little profit.
while product shortage or scarcity happens as a result of decrease in resources or decrease in supply, hence; results into scarcity of products which eventually aids increment of price
Explanation:
Answer:
c. average variable
Explanation:
The options for the question are;
. a) marginal
b. average total
c. average variable
d. average fixed
Predatory pricing can be regarded as
pricing strategy which is an illegal act whereby dominant firm in an particular industry set their price low so that compitition can be eliminated, this act usually aid Monopoly in the market. It should be noted that The practice of setting prices deliberately below average variable costs in an effort to drive a competitor out of the market is known as predatory pricing.