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3 years ago

The kinked-demand curve of an oligopolist is based on the assumption that

Business

1 answer:

masha68 [24]3 years ago

5 0

Answer:

competitors will follow a price cut but ignore a price increase.

Explanation:

The Kinked demand curve model of oligoplolist is based on the assumption that competitors will follow price cut but ignore a price increase because of interdependence among firms price is rigid in oligopoly market. When a firm raises the price of its products none of its competitors will follow the same whereas in case firm reduces its price its competitors will follow the same.

Thus, it is prudent behaviour on the part of a firm not to change in the prices of its products frequently. It is because this reaction of rival firms, the demand curve face by an oligopoly firm has a kink. The kink is formed at prevailing price level.

The portion of demand curve above the kink is more elastic implying, when oligopolist increase the price of its product none of its competitors will follow it with expectation to capture the market demand created due rise in prices by first firm.

The lower portion of the kink is relatively inelastic showing that in case an oligopolist reduces its price its rival firms will also reduce their prices with a view to not to lose their market demand. Thus, it will not beneficial for the oligopolist in either of the situations. Therefore, it will stick to the prevailing price.

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Neon Electronics Inc. sourced touch screens required for its tablet computers, cell phones, and televisions from a manufacturer

tamaranim1 [39]

This scenario best illustrate Backward vertical integration

Explanation:

Backward integration is a vertical integration that extends the role of a organization to perform roles traditionally performed by firms in the supply chain.

In other terms, backward integration is where an enterprise imports another company providing the necessary goods or services for production.

For examples, an company might purchase the product or raw materials manufacturer. Businesses often complete retrograde incorporation of these other businesses or combine of them. However, they may set up their own divisions to perform this mission.

7 0

3 years ago

For a restaurant, the logical activity base for wages expense would be a. number of customers. b. number of employees. c. number

vovikov84 [41]

Answer: The answer is B, the logical activity base for salary expenses is Number of employees.

Explanation:

For a restaurant, the logical activity base for salary expenses is the number of employees because the more employees you have, the more salary expenses the company will have.

6 0

3 years ago

Here are data on two companies. The T-bill rate is 5.8% and the market risk premium is 7.4%.

cupoosta [38]

Answer:

18.38% and 13.2%

Explanation:

As we know that

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

So for Discount store, it is

= 5.8% + 1.7 × 7.4%

= 5.8% + 12.58%

= 18.38%

And for everything store, it is

= 5.8% + 1.0 × 7.4%

= 5.8% + 7.4%

= 13.2%

The Market rate of return - Risk-free rate of return) is also known as the market risk premium and the same is applied.

5 0

3 years ago

Cost of Preferred Stock Marme, Inc., has preferred stock selling for 96 percent of par that pays an 11 percent annual coupon. Wh

nataly862011 [7]

Answer:

Component cost of preferred stock is 11.4583 %

Explanation:

Given Data:

Preferred stock selling=96 percent of par.

Annual Coupon =11 percent

Required:

What would be Marme’s component cost of preferred stock?

Solution:

The formula we are going to use is:

$i_{stock}=\frac{D_o}{P_o}$

Where:

$D_o$ is 11 percent annual coupon

$P_o$ preferred stock selling for 96 percent of par

If we convert the above percentage to dollar using the scale $1=1% then:

$D_o$ =$11

$P_o$ =$96

$i_{stock}=\frac{\$11}{\$96}\\ i_{stock}=0.114583$

Component cost of preferred stock is 11.4583 %

7 0

3 years ago

Select one or more of the choices below that would properly complete the following statement.When a nation runs a trade deficit,

castortr0y [4]

Answer: it experiences a capital inflow.

Explanation:

A trade deficit is a situation that occurs when the imports of a country is greater than the exports of the country. This is usually measured in monetary terms. For example, let's say in a certain year, the United States exported $3 trillion in goods and it imported goods worth $4 trillion, th n the trade deficit will be ($4 trillion - $3 trillion) = $1 trillion.

Trade deficit can be caused because of capital deficiency. This will then lead to capital flowing into the country that is experiencing the trade deficit.

3 0

3 years ago