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2 years ago

The margin of safety is the amount that sales can drop before the company incurs a loss.

Business

1 answer:

torisob [31]2 years ago

4 0

a.true

Because with said the the margin of safety is the amount that sales can drop before the company incurs a loss.

read the question aloud and it will make sense.

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Calculations 9 of 10 close At a firm's profit-maximizing level of output, its price is $200 and its short-run average total cost

defon

Answer:

Should shut down if its short-run average variable cost exceeds $25.

Explanation:

This directly explains the firms profit maximizing level of output in a short run. And in the scenario above, the firm made a $25 gain per unit output, it is advised the firm should shut down if its shut run average variable cost exceeds $25.

A process that companies undergo to determine the best output and price levels in order to maximize its return. The company will usually adjust influential factors such as production costs, sale prices, and output levels as a way of reaching its profit goal. There are two main profit maximization methods used, and they are Marginal Cost marginal Revenue Method and Total Cost total Revenue Method. Profit maximization is a good thing for a company, but can be a bad thing for consumers if the company starts to use cheaper products or decides to raise prices.

3 0

3 years ago

What is an internship?

valentinak56 [21]

Simple... My cousin is doing a internship, he is going to college and getting his degree in engineering. While he's getting his 4 year scholarship he's also working for a engineering factory to get paid while he's in college.

8 0

3 years ago

Read 2 more answers

A country has invested heavily in building cars and designing electronics. Which action would it most likely take if it wanted t

nata0808 [166]

Answer:

require businesses in the country to both build cars and design electronics

6 0

2 years ago

Jane is the manager of a local bank branch in College Station where he consumes bundles of two commodities x and y. Prices in Co

Sholpan [36]

Answer:

Remain the same

Explanation:

$U(x,y) = xy^{2}$ ......................................................... (1)

ICS = Income in College Station = $6,000

CSpx = Price of x in College Station = 1

CSpy = Price of y in College Station = 5

ID = Income in Dallas = ?

Dpx = Price of x in Dallas = 4

Dpy = Price of y in Dallas = 5

Step 1

Assume that Jane always divides his income in College Station equally into two, i.e. $3,000 each, to buy x and y, the quantities of x and y he can buy in College Station can be calculated by dividing the $3,000 by the prices of x and y. This is calculated as follows:

CSqx = Quantity of x in College Station = $3,000 ÷ 1

= 3,000 units

CSqy = Quantiy of y in College Station = 3,000 ÷ 5

= 600 units

Jane's utility in College Station can be calculated by amending equation (1) and substituting 3,000 units for x and 600 units for y as follows:

$CSU(CSqx,CSqy) = (CSqx.CSqy^{2})$

$CSU(3000,600) = (3000*600^{2})$

= 3,000 * 360,000

CSU(3000, 600) = 1,080,000,000 utils .......................... (2)

Step 2

Since Jane is guaranteed a salary in Dallas with which he would be able to buy exactly what he buys in College Station, this implies that the salary in Dallas will make him to be able to buy 3,000 units of good x and 600 units of good which he currently buys in College Station.

Since

CSpx = 1, which is less than Dpx = 4

But

CSpy = 5, is equal to Dpy = 5

We need to calculate how much his Income will increase in Dallas to be able to buy 3,000 units of good x in Dallas given that its price is $4. Therefore, his income will increase by multiplying $4 by 3000 units and deduct $3,000 he was spending in College Station on x as follows:

IID = Increase in Income in Dallas = (3,000 * $4) - $3,000

= $12,000 - $3,000

= $9,000

Therefore, ID (Income in Dallas) is the addition of IDD and ICS (Income in College Station) calculated as:

ID = IID + ICS

= $9,000 + $6,000

= $15,000

Conclusion

With the ID of $15,000, Jane will be spending $12,000 to buy 3,000 units of good x in Dallas and continue to spend $3,000 to buy 600 units of good y in Dallas.

This will make Jan's utility in Dallas (DU) to be equal to 1,080,000,000 utils as obtained in equation (2) above.

Therefore, Jane's utility will remain the same based on the tangency rule which states that a consumer will choose a combination of two goods at which an indifference curve is tangent to the budget line, i.e. his income.

5 0

2 years ago

Rachel Johnson has net monthly income of $5,210. She has a monthly auto loan payment of $685, a student loan payment of $375, an

liq [111]

Answer:

Debt payments to income ratio = 22.74%

Explanation:

Debts payment to Income ratio is calculated as follows:

= $\frac{Total\ debt\ payment}{Total\ Income}$

We have total debts payment = auto loan payment $685 + student loan payment $375 + credit card payment $125 = $1,185

Total Income = $5,210

Note: Credit card is also a kind of debt as firstly all the expenses are met during the period and then the payment is made at the end of the period, therefore, there is a loan in the period. Therefore, it will be considered for payment of debt.

Debt payments to income ratio = $\frac{1,185}{5,210} = 22.74$

That means the debts are 22.74% of income.

5 0

2 years ago