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KIM [24]
3 years ago
5

A perfectly competitive industry consists of many identical firms, each with a long-run average total cost of LATC = 800 – 10Q +

0.1Q2 and long-run marginal cost of LMC = 800 – 20Q + 0.3Q2. In long-run equilibrium, each firm produces a quantity of ____.
Business
1 answer:
harkovskaia [24]3 years ago
7 0

Answer:

Each firm produces a quantity of 50 in long run equilibrium.

Explanation:

If a perfectly competitive industry of many identical firms has a long-run average total cost of LATC = 800 – 10Q + 0.1Q² and long-run marginal cost of LMC = 800 – 20Q + 0.3Q², for long run equilibrium to occur, LATC must be equal to LMC i.e LATC = LMC.

Equating both cost equation to get quantity Q each firm produces gives;

800 – 10Q + 0.1Q² = 800 – 20Q + 0.3Q²

Bringing all the terms to one side of the equation, we will have;

800-800-10Q+20Q+0.10Q²-0.3Q² = 0

10Q-0.2Q² = 0

Factorizing out Q, the equation becomes;

Q(10-0.2Q) = 0

From the resulting equation;

10-0.2Q = 0

10 = 0.2Q

Q= 10/0.2

Q = 50

This shows that each firm produces a quantity of 50 in long run equilibrium.

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Suppose that borrowing is restricted so that the zero-beta version of the CAPM holds. The expected return on the market portfoli
statuscvo [17]

Answer:

The expected return on a portfolio is 14.30%

Explanation:

CAPM : It is used to described the risk of various types of securities which is invested to get a better return. Mainly it is deals in financial assets.

For computing the expected rate of return of a portfolio , the following formula is used which is shown below:

Under the Capital Asset Pricing Model, The expected rate of return is equals to

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

= 8% + 0.7 × (17% - 8%)

= 8% + 0.7 × 9%

= 8% + 6.3%

= 14.30%

The risk free rate is also known as zero beta portfolio so we use the value in risk free rate also.

Hence, the expected return on a portfolio is 14.30%

6 0
3 years ago
1-Started business with Cash OMR 100000
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Stabilize the float of economy and value
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As a young child, Hermes suffered from severe allergies and required weekly visits to a clinic in order to receive injections. A
OverLord2011 [107]

Answer: Classic conditioning

Explanation: Classic conditioning is a state of mental disorder caused by some incident leading to phobias, sudden anger or sexual arousal.

In the given case, Hermes had a phobia to go to a doctor's office which is caused by some bad experiences in childhood. Thus, we can conclude that the behavior of hermes explained is an example of classic conditioning.

8 0
3 years ago
Lower-of-Cost-or-Market Inventory On the basis of the following data, determine the value of the inventory at the lower of cost
ANTONII [103]

In class 2 ., The Model D is the Top/ favorite one having highest market return (24%) with lowest inventory cost ($79)

Explanation:

To Determine the value of the inventory at the lower of cost or market applied to each item in the inventory. simply we should calculate the profit margin for each category

Profit margin =  (market value - cost price) = Profit ÷ cost price × 100

Class 1:

Model A

46 $116 $139  

Profit margin = (139 - 116) = 23  ÷ 116 × 100 = 19.32%

Model B

49 243 239

Profit margin =  (239 - 243)= -4 ÷ 243 × 100 = - 1.65% (loss)

Model C

43 233 252

Profit margin =   (252 - 233) = 19 ÷ 233 × 100 =  8.15%

Class 2:

Model D

37 79 98

Profit margin =  (98 - 79) = 19 ÷ 79 × 100 =  24%

Model E

6 151 130

Profit margin =  (130 - 151) = - 21 ÷ 79 × 100 = -13.91 % (loss)

Result

In class 1

Model A is preferable., It has the lowest inventory value and has highest market value (Returns) at 19.82%

In class 2

Model D is preferable., It has the lowest inventory value and has highest market value (Returns) at 24%

Overall the Model D is the Top/ favorite one having highest market return with lowest inventory cost

3 0
3 years ago
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