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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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The Harrisburg Store has net working capital of $2,715, net fixed assets of $22,407, sales of $31,350, and current liabilities o

Maurinko [17]

Answer:

1.08 dollars of sales are generated from every $1 in total assets.

Explanation:

Calculate Current asset from net working capital formula:

Net Working capital = Current Assets - Current Liabilities

$2,715 = Current Assets - $3,908

Current Assets = $2,715 + $3,908

Current Assets = $6,623

Now calculate Total Assets:

Total Assets = Fixed Asset + Current Assets

Total Assets = $22,407 + $6,623

Total Assets = $29,030

We can calculate dollars' worth of sales are generated from every $1 in total assets by following formula:

Asset turnover ratio = Net Sales / Total Assets

Asset turnover ratio = $31,350 / $29,030 = 1.08

6 0

3 years ago

Doubling the circumference of an oil pipeline more than doubles the volume of oil that can be pumped through. This strategy is c

Alika [10]

Answer:

Economies of scale

Explanation:

Economies of scale is described as the cost benefit or advantage which is experienced through the firm, when it rises the output level. Under economies of scale, the fixed costs did not vary or change with decreases or increases in the units of the production volume and the variable costs are dependent with rise in the output.

So, in this case, when the circumference is doubled of the oil pipeline, more than the volume doubles. This technique is selected through the large firms or business as it will result in the economies of scale.

4 0

4 years ago

A business in which the owners have little personal responsibility for the company’s debts and actions is called a

adell [148]

I believe the answer is A.

7 0

3 years ago

Emco Company uses direct labor cost as a basis for computing its predetermined overhead rate. In computing the predetermined ove

Andru [333]

Answer:

B. overstate the predetermined overhead rate.

Explanation:

As we know

The Predetermined overhead rate would be equal to

Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor-hours or machine hours)

In the given question, the direct labor cost is used for computing the predetermined overhead rate which is already wrong.

To find out the predetermined overhead rate, we always use the indirect cost instead of direct cost

This error could overstate the predetermined overhead rate as it would increase the indirect labor due to which overhead is also increased. So, automatically the rate would also be increased.

8 0

3 years ago

Incomplete manufacturing costs, expenses, and selling data for two different cases are as follows.(a) Indicate the missing amoun

Sliva [168]

Answer:

Incomplete manufacturing costs:

Case 1 Case 2

Direct materials used $9,700 $3,900

Direct labor 5,100 8,100

Manufacturing overhead 8,400 4,100

Total manufacturing costs 23,200 16,100

Beginning work in process inventory 1,100 9,100

Ending work in process inventory 7,200 3,100

Sales revenue 25,000 31,500

Sales discounts 2,600 1,500

Cost of goods manufactured 17,100 22,100

Beginning finished goods inventory 5,000 3,400

Goods available for sale 22,100 25,500

Cost of goods sold 18,600 22,900

Ending finished goods inventory 3,500 2,600

Gross profit 3,800 7,100

Operating expenses 2,800 2,000

Net income 1,000 5,100

Explanation:

To work out the missing figures involves some manoeuvres of the figures, working up or down as the case may be. For example, to calculate the cost of goods sold in Case 1, I deducted the ending inventory of finished goods from the Goods available for sale. With this figure, it becomes possible to work out the Gross profit and the Net income.

3 0

3 years ago