Answer:
The price is above equilibrium; quantity supplied is more than quantity demanded.
Explanation:
A surplus in the market means the actual price of a product is above the equilibrium point. The quantity supplied is much more than the quantity demanded. A considerable population of buyers will not afford the product due to its high price.
Higher prices will cause the demand for goods to decrease in the market. When there is a surplus in the market, sellers will tend to reduce the price hence increasing the quantity demanded. This will decrease the quantity supplied. The buyers will now afford the product.
Answer:
A. demand for labor; minimum wage
Explanation:
When an effective minimum wage is introduced, the number of hours of labor employed is determined by the <u>DEMAND FOR LABOR</u> and the <u>MINIMUM WAGE</u>
Answer:
The correct answer is option 2.
Explanation:
In a consumer electronics industry, the three largest firms hold close to 85 percent of the industry's market share. These firms are interdependent, and each firm must consider the strategic actions of its competitors.
These characteristics indicate that the industry is an oligopoly market.
In an oligopoly, there are few firms in the market. These firms are interdependent and each firm has to consider the reaction of its rival in making a decision. There is a high degree of competition in the market.
Because of the high degree of competition and interdependence, the price generally remains sticky.
Answer:
The stock is undervalued. As the required rate of return (6.5%) on market is less than the actual return (7%), the stock is said to be undervalued as it provides an actual return greater than the required rate of return.
Explanation:
To check if a stock is over valued, undervalued or correctly valued, we simply compare the required rate of return on a stock as measured by CAPM with the actual return on the stock.
We can calculate the required rate of return using CAPM equation. The formula for required rate of return under CAPM is,
r = rRf + Beta * (rM - rRF)
Where,
- rRf is the risk free rate
- rM is the return on market
r = 0.05 + 0.5 * (0.08 - 0.05)
r = 0.065 or 6.5%
As the required rate of return on market is less than the actual return, the stock is said to be undervalued as it provides an actual return greater than the required rate of return.
Answer:
Gain on Disposal 25,100
Explanation:
book value
cost- accumulated depreciation
387,400 - 312,900 = 74,500
trade-in:
equipment 160,000
cash <u> 40,000 </u>
total 200,000
gain 200,000 - 74,500 = 125,500
As it lack commercial substance we recognize gain for the portion of cash received doing cross multiplication
200,00 --> generates 125,500 gain
40,000 --> generates X gain
40,000/200,000 x 125,500 = <em>25,100</em>