Answer: Company should not expand to either.
Explanation:
Find the expected values of expanding to either country and pick the country with the highest expected value:
China:
= ∑(Probability of outcome * Outcome)
= (20% * 2,000,000) + (30% * 1,000,000) + (50% * -2,000,000)
= -$300,000
Vietnam:
= (70% * 1,000,000) + (30% * -2,500,000)
= -$50,000
<em>Both countries result in an expected loss so company should not expand to either of them. </em>
An
example of a case where a cost and revenue function do not have a break
even point includes, when the profit margin is larger than the losses
of the business.
Answer: Option A : by themselves do not tell us what decisions the firm will make.
Explanation: Using the cost curve to make decisions is the function of the firm's internal decision mechanism
Answer:
C
Explanation:
In this question, we are looking at what would be the later effect of the Congress taking steps to make sure that there is an increase in the amount of returns on savings for example, say the amount of interest rate on saved money is increased.
What will happen in this case is that the equilibrium interest rate would be lower while the equilibrium quantity of loanable funds will be higher. What he meant by the equilibrium interest rate is that it is the interest rate at which the amount of money demanded is equal to the amount of money supplied.
Due to the legislation by congress, it is expected that more money would be supplied in terms of bank deposits as people would want to make a higher profit off the legislation. The effect of this is that the equilibrium interest rate will be lower as its balance would have been upset my the availability of more deposits and less demand.
We also say that the equilibrium level of loanable funds will be higher. This is because there would be more money present in the vaults of the bank as savings have been encouraged and people are expected to fill the bank with more money. This thus means the bank has more money to throw around via loans as there is an increase in the amount of savings. This surely would drive up the equilibrium quantity of loanable funds
