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Ilia_Sergeevich [38]
3 years ago
12

You are a manager for a monopolistically competitive firm. From experience, the profit-maximizing level of output of your firm i

s 100 units. However, it is expected that prices of other close substitutes will fall in the near future. How should you adjust your level of production in response to this change
Business
1 answer:
Paraphin [41]3 years ago
5 0

Answer:

hi your question lacks the required options here is the complete question and options

You are a manager for a monopolistically competitive firm. From experience, the profit-maximizing level of output of your firm is 100 units. However, it is expected that prices of other close substitutes will fall in the near future. How should you adjust your level of production in response to this change

a. Produce less than 100 units

b. Insufficient information to decide

c. Produce 100 units

d. Produce more than 100 units

Answer : Produce less than 100 units

Explanation:

A monopolistic firm is a firm that has the sole responsibility or sole ownership of the right of production of certain goods and services. and such products are profit maximizing products because the demand for the products determines the price in the market and also the products are produced at marginal cost equaling its marginal revenue.

From experience when the prices of the close substitutes of the product fall the demand for the product will decrease hence its market price will fall therefore it is wise to produce less than the usual 100 units to still maximize profit.

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Output and employment will increase exerting modest upward pressure on the price level.      

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Ashton wants to generate interest in the new branch of his hobby stores that is opening next week. He plans to offer temporary p
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B. Price promotion

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3 years ago
Spartan Systems reported total sales of $374,400, at a price of $24 and per unit variable expenses of $13, for the sales of thei
V125BC [204]

Answer:

$214,500

Explanation:

For the computation of the amount of contribution margin first we need to follow some steps which are shown below:

No of units sold = Total sales ÷ selling price per unit

= $374,400 ÷ $24

= $156,00

Variable cost = No of units sold × Variable cost per unit

Variable cost = $15,600 × $13

=$202,800

Contribution margin = Sales - Variable cost

= $374,400 - $202,800

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CM ratio = Contribution margin ÷ Sales

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Contribution margin = CM ratio × Sales Contribution margin

= 0.46 × (1.25 × $374,400)

= $214,500

3 0
3 years ago
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