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oksian1 [2.3K]
3 years ago
15

A monopolistically competitive firm is currently charging a price of $10 and producing 12,000 units/month. It faces monthly fixe

d costs of $15,000 and has an average variable cost of $6/unit. In the long run, we would expect:a. ​The firm to go out of businessb. ​The price will fall and output will fallc. ​The price will rise and output will falld. ​The price will fall and output will rise
Business
1 answer:
Ipatiy [6.2K]3 years ago
4 0

Answer:

The correct answer is option d.

Explanation:

A monopolistic firm is producing 12000 units at a price of $10 per units.

The average variable cost per unit is $6/unit.

The fixed costs are $15,000.

The average fixed costs will be

=\frac{TFC}{Q}

=\frac{15,000}{12,000}

=1.25

The average total cost is

=average fixed cost+average variable cost

=$(6+1.25) per unit

=$7.25 per unit

Here, the price per unit is greater than average total cost per unit. This means that the firm is having supernormal profits. This will attract other firms to join the market.

In the long run, when new firms enter the market, the market supply will increase leading to a fall in price.

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Skoff Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished
puteri [66]

Answer:

The correct answer is A.

Explanation:

Giving the following information:

Refurbishing materials:

Variable cost= $600

Fixed costs= $18,800

Estimated cost= 600*35 + 18,800= $39,800

Actual cost= 600*32 + 18,800= $38,000

Refurbishing activity variance= Estimated - actual cost

Refurbishing activity variance= 39,800 - 38,000= 1,800 favorable

5 0
3 years ago
Chester's product manager is considering lowering the price of the Cone product by $2.50 and wants to know what the impact will
lozanna [386]

Answer:

The contribution margin will decrease by 2.50

Explanation:

Sales \: Revenue - Variable \: Cost = Contribution \: Margin

IF sales decreases, then the contribution margin decreases.

That's because, there is less money to pay for the variable cost.

The company will also have to sale more units to break even, as now each units contribution is fewer.

Cone's should evaluate how much their sales are expected to increase for the lower price and be cautious

7 0
3 years ago
Pedro is using a blog to promote his Afro-Cuban band. His articles on topics ranging from his influences to the instruments used
german

Answer:

engagement, conversion

Explanation:

Blog refers to a web page run by an individual or small group with the purpose of marketing. Blog targets to the specific audience.

In the given question,

Pedro is using a blog to promote his Afro-Cuban band. His main purpose is to bring people to the online store where they can purchase CDs.

For Pedro, the two most important measurements he tracks are <u>engagement</u> and <u>conversion</u>

8 0
2 years ago
The following information should be used to according to the provisions of GAAP (Statement of Cash Flows) and using the followin
yanalaym [24]

Answer:

                   

Explanation:

3 0
2 years ago
Coolibah Holdings is expected to pay dividends of $ 1.10 every six months for the next three years. If the current price of Cool
Viktor [21]

Answer:

$25.15  

Explanation:

The price the stock would be sold at the end of the three-year holding period can be computed using excel FV formula stated below:

=fv(rate,nper,pmt,-pv)

rate is the semiannual cost of capital i.e 14%/2=7%

nper is the number of dividend payments over three-year period which is 6

pmt is the amount of semiannual dividend payment

pv is the current stock price

=fv(7%,6,1.1,-22)=$25.15  

6 0
3 years ago
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