Monetary payments a firm makes to pay for resources are called

If the absolute value of the own price elasticity of demand is greater than 1, then demand is said to be:

OLEGan [10]

Answer:

A. elastic.

Explanation:

Elasticity of demand measures the responsiveness of quantity demanded to changes in price.

Demand is elastic when a change in price leads to a change in quantity demanded. The coefficient of elasticity for elastic demand is usually greater than one.

Demand is inelastic when a change in price has no effect on quantity demanded.

The absolute value of the coefficient of elasticity for inelastic demand is usually less than 1.

Demand is unitary when a change in price leads to an equal proportional change in quantity demanded.

The absolute value of the coefficient of elasticity for unitary demand is usually equal to one .

I hope my answer helps you.

8 0

2 years ago

A competitive firm currently produces and sells 7,500 units of output at a price of $2.50 per unit. The firm's average fixed cos

saveliy_v [14]

Answer:

A. $-2,250

B. The firm should continue to operate in the short run because price is greater than average variable cost

C.The firm should exit in the long run because it is making losses

D. In the long run, prices would increase because in a competitive firm, price must equal average cost. As firms exit the industry, supply would fall and this would lead to an excess of demand over supply. As a result, price would rise

Explanation:

A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.

In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.

Profit = Total revenue - Total cost

( $2.50 - $2.80) × 7,500 = $-2,250

The firm is earning a loss

A firm should shutdown in the short run if price is less than average variable cost.

Average variable cost = average total cost- average total cost

$2.80 - $0.75 = $2.05

2.50 > 2.05 so the firm should continue to operate in the short run.

The firm should exit in the long run because it is making losses

In the long run, prices would increase because in a competitive firm, price must equal average cost

I hope my answer helps you.

3 0

2 years ago

the two principal policy tools that the federal government uses to manage economic conditions are monetary policy and fiscal pol

steposvetlana [31]

Monetary policy is used to control the size of the money supply to stimulate or moderate business activity levels in the economy. in contrast, fiscal policy uses government spending and taxation to do the same.

<h3>What is monetary and fiscal policy?</h3>

Fiscal policy are the steps taken by the government to change the business levels in the economy. The tools of fiscal policy are taxes and government spending. Fiscal policy can be expansionary or contractionary.

Expansionary fiscal policy is when the government increases the money supply in the economy either by increasing spending or cutting taxes. Contractionary fiscal policies is when the government reduces the money supply in the economy either by reducing spending or increasing taxes

Monetary policy are policies taken by the central bank of a country to shift aggregate demand. The tools of monetary policy are open market operations, reserve requirement and discount rate.

Expansionary monetary policy are polices taken in order to increase money supply. Contractionary monetary policy are policies taken to reduce money supply.

To learn more about monetary policy, please check: brainly.com/question/3817564

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7 0

1 year ago

Which of the following is an advantage of flexible manufacturing technologies? They have reduced the importance of technological

Georgia [21]

Answer:

They have increased the importance of production economies of scale.

Explanation:

Flexible production allows the manufacture of different types of products in the same industrial production line. This makes companies lower costs by avoiding tool change, time savings, and industry structure.

This type of economy fits into the description of economies of scale. Economies of scale are those where the increase in production results in a decrease in the average cost of the product. Increasing production - by including more products on the production line - without a proportional increase in the factory's installed capacity leads to a reduction in the average cost of production, ie it is an economy of scale.

4 0

3 years ago

Ingrid Inc. has strict credit policies and only extends credit to customers with outstanding credit history. The company examine

Leviafan [203]

Answer:

Ingrid Inc.

a. Ingrid's balance in accounts receivable on December 31, 2018, prior to the adjustment is:

= $833,720.

b. Ingrid's balance in allowance for doubtful accounts on December 31, 2018, prior to the adjustment is:

= $6,800.

c. Adjusting Entry:

Debit Bad Debts Expense $3,180

Credit Allowance for Doubtful Accounts $3,180

To record the bad debts expense for the year and bring the balance of the Allowance for Doubtful Accounts to a credit balance of $6,800

Explanation:

a) Data and Calculations:

January 1, 2019 balances:

Accounts Receivable $478,000

Allowance for Doubtful Accounts $7,900 (credit)

Accounts Receivable $3,075,000 Sales Revenue $3,075,000

Cash $2,715,000 Accounts Receivable $2,715,000

Allowance for Doubtful Accounts $4,280 Accounts Receivable $4,280

Ending balance:

Allowance for Doubtful Accounts $6,800 (Credit)

T-Accounts

Account Titles Debit Credit

Beginning balance $478,000

Sales Revenue $3,075,000

Cash $2,715,000

Allowance for Doubtful Accounts $4,280

Ending balance $833,720

Allowance for Doubtful Accounts

Account Titles Debit Credit

Beginning balance $7,900

Accounts Receivable $4,280

Bad Debts Expense 3,180

Ending balance $6,800

6 0

2 years ago