Answer:
III. If a competitive industry is in long-run equilibrium, a decrease in demand causes firms to earn negative profit because the market price will fall below average total cost.
Explanation:
A perfect competition is characterised by many buyers who sell homogenous products.
All firms in a perfect competition earn zero economic profit in the long run because there are no barriers to entry or exit.
In the long run, equilibrium occurs at: P = LMC = LATC
If demand falls, prices would fall below average total cost and the firm would earn negative profit .
Answer:
6% = 4500
5% = 3500
Explanation:
wo equations can be derived from the question
x + y = $8,000 equation 1
0.05x + 0.06y = $445. equation 2
x = amount invested in 5%
y = amount invested in 6%
multiply equation 1 by 0.05
0.05x + 0.05y = 400 equation 3
subtract equation 3 from 2
0.01y = 45
y = $4500
substitute for y in equation 1
8500 - 4500 = 3500
Answer:
1. This is true because demand in market A is more inelastic which means demand curve and marginal revenue curve are steeper in this market. at any quantity marginal revenue will be higher in market A than in market B
2. This is true because market where demand is inelastic have a higher price. This is because revenue is increased when higher price is charged in market with inelastic demand.
3. This is false/uncertain because when price is higher in market a the quantity will be lower relativity. This is due to the downward sloping demand function in which price is increased quantity will decline.
Explanation:
Answer:
B is the correct option.
Explanation:
This principle follows the assumption that a company will remain in business in the future. It means that the business will not have to halt operations or to liquidate the assets in the future. According to this principle, the accountant postpones the recognition of some expenses till a later period, and in that period the company will be in business will be effectively using the assets. It is a very important concept, without this, the company will not be able to prepay the expenses.
