Answer:
$5
Explanation:
Consumer surplus is defined as the difference between the highest amount a consumer is willing to pay for a product and the amount the consumer actually pays for the product.
Consumer surplus = willingness to pay - market price
The willingness to pay is the highest amount a consumer would be willing to pay for the purchase of a good or service. It is the value a consumer places on a product.
Before the tax, Ken's consumer surplus = $20 - $15 = $5
Before the tax, Mark's consumer surplus = $17 - $15 = $2
Total consumer surplus- $2 +$5 = $7
After the tax, ken's consumer surplus =$20-$16=$4
After the tax, Mark's consumer surplus = $17 - $16 = $1
Total consumer surplus- $4 + $1 = $5
Answer:
The company is treated as a separate tax entity by law.
It is possible to raise large amounts of capital by selling company stock.
Explanation:
A corporation ownership structure is considered a legal person. The law recognizes a corporation as a distinct legal entity with equal business rights like a human being. The corporation has the right to engage in business activities, acquire assets, and enter into commercial contracts. At the end of a period, a corporation is expected to file tax returns.
A corporation has the advantage when it comes to raising capital. It is allowed to offers shares to investors in exchange for capital. Investors turn to shareholders(owners) when they purchase the shares of a corporation.
Answer: Option D
Explanation: In simple words, contingent liability refers to those liabilities the arise of which depends on some event that may or may not happen in the future. Potential lawsuits and warranties on products sold are some of the many examples of contingent liabilities.
These liabilities are recorded so that the firm can make suitable reserves and funds in advance to tackle thee liabilities but they are only recorded when the amount of loss can be reasonably estimated and it is probable that liability will arise.
Answer:
correct option is maximizing its profit
Explanation:
given data
firm is selling = 200 units
output = $3 each
fixed cost = $100
variable cost = $350
solution
we get here Total average cost that is
Total average cost = variable cost + fixed cost .............1
put here value
Total average cost = 350 + 100
Total average cost = $450
and
Cost per unit will be
Cost per unit = average cost ÷ no of units ............2
Cost per unit = 450 ÷ 200
Cost per unit = $2.25
so here firm is incurring per units is $2.25 but here earning per unit is $3 .
so that here firm is earning economic profit
as here market price is greater than earning maximum profit
so correct option is maximizing its profit
Answer:
Their profits will increase by $400
Explanation:
Consider the incremental costs and revenues arising from the special order
Note : Fixed costs are irrelevant for this decision because the special order is being accepted within the relevant range.
<u>Analysis of incremental costs and revenues</u>
Sales (200 cases×$19) $3,800
Variable Cost (200 cases×$17) $3,400
Net Income / (loss) $400
Result : Their profits will increase by $400
