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Kobotan [32]
3 years ago
15

Suppose Nicholas owns a business making Christmas tree ornaments. Currently, he makes 300 ornaments a month. At this level of pr

oduction, each additional ornament takes him 30 minutes to make and costs him $5 in materials. Nicholas makes his ornaments in a small studio that he rents for $300 a month. Nicholas can easily increase or decrease the amount of time he spends making ornaments, and he can easily go to the store to buy additional materials to make the ornaments, but he has a year-long lease on his studio, so he has to pay his monthly rent no matter how many ornaments he produces each month. Nicholas values his time at $10 per hour. Other than his time, the cost of the materials and the rent on his studio, Nicholas has no additional production costs.
a At Nicholas's current level of production, what is the marginal cost of making an additional ornament each month?
b. At Nicholas's current level of production, what is the monthly average fixed cost of each ornament?
c. Assuming that it is not Nicholas's interest to shut down, should he change his current monthly level of production if he can sell each ornament for $15? If so, how should his production change?

1. He should not make any changes.
2. He should decrease the number of ornaments he makes each month.
3. He should increase the number of ornaments he makes each month.

d. How would Nicholas’s profit-maximizing level of output each month differ if his monthly rent were $350 instead of $300?

1. His profit-maximizing level of output would be higher.
2. His profit-maximizing level of output would be lower.
3. His profit-maximizing level of output would not change.

e. How would Nicholas’s profit-maximizing level of output each month differ if the materials to make each ornament cost $4 instead of $5?

1. His profit-maximizing level of output would not change.
2. His profit-maximizing level of output would be lower.
3. His profit-maximizing level of output would be higher.
Business
1 answer:
Fudgin [204]3 years ago
3 0

<u>Solution and Explanation:</u>

1. MC = Cost of raw material + Cost of time

MC = 5 plus (10 divide by 2)

MC = $10

2.  TFC = $300

Q = 300 ,  AFC = TFC/Q = 300 divide by 300 = $1

3.  His profit maximizing output would be higher

Reason: P = MR = $15 ,  MC = $10

Since MR > MC, and at the profit maximizing point MR = MC, it is better for Nicholas to increase his output.

4.  His profit maximizing output would be higher

Reason: P = MR = $15 ,  MC = $4 + $5 = $9

Since MR > MC, and at the profit maximizing point MR = MC, it is better for Nicholas to increase his output.

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Answer:

Explanation:

Trade balance formula = Country’s Exports – Country’s Imports.

If Malaland exports $59 billion in goods to Bursia, and Malaland imports $42 billion of goods from Bursia , what is the goods trade balance for Malaland? $ 17 billion

What is the best way to describe Malaland's goods trade balance?

It is a positive trade balance; good's exports are greater than good's imports. Malaland companies will receive more capital and this can translate into a higher standard of living for the Malaland population.

If Malaland exports $44 billion in services to Bursia, and imports $49 billion of services from Bursia, what is the services trade balance for Malaland? $-5 billion.

What is the best way to describe Malaland's services trade balance?

It is a negative trade balance; service's imports are greater than service's exports. This could lead to protectionist measures that in the long run increases consumer prices, reducing living standards of Malaland population.

What is the overall balance of trade for Malaland if it exports $44 billion in services and $59 billion in goods while importing $49 billion in services and $42 billion in goods? $12 billion

What is the best way to describe Malaland's overall trade balance?

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2 years ago
Table 17-29 Suppose that two firms, Wild Willy's Wonderdrink (Firm W) and Hyper Hank's Hydration (Firm H), comprise the market f
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Both Firm W and Firm H have a dominant strategy to advertise.

Explanation:

Dominant strategies, never despite what other competitors do, are treated similarly than others. In game theory, two forms of strategic supremacy exist:

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Especially if one game is only weakly dominant (this means that it also does at least the same thing as any other strategy, but it just can in certain situations match other strategies, not beat them), and the same wages would apply to the player may be applied to more than one dominant strategy per player.

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2 years ago
1. If Bodin Company plans to sell 480,000 units during the year, compute the number of units the firm would have to manufacture
Dmitriy789 [7]

Answer:

450,000 Units

Explanation:

The complete part of the question is as below:

Bodin Company budgets on an annual basis. The following beginning and ending inventory levels (in units) are planned for the year 20x1. Two units of raw material are required to produce each unit of finished product.

                             January 1  December 31

Raw material         35,000    45,000  

Work in process   12,000    12,000  

Finished goods   80,000    50,000

Solution:

Units to be manufactured to sell 480,000 Units = Sales + Closing Inventroy - Opening Inventory

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3 years ago
Read 2 more answers
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Answer:

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Where,

P = Monthly required payment = ?

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Substituting all the figures into equation (1), we have:

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Answer:

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Calculation to determine the best estimate of the after-tax cost of debt.

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Where,

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Pv = $875

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t represent tax rate of 40%

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After tax cost of debt=5.14%

Therefore the best estimate of the after-tax cost of debt is 5.14%

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