Answer: $1,000
Explanation:
Given Data;
Total government demand is Q = 800 -10P
marginal cost (Mc) = $50
contracted price (cp) = $70 per unit
Therefore;
Marginal Revenue ( MR ) = Marginal Cost ( MC)
Q = 800 -10P
800 - Q = 10P
Divide through by 10, where Q = 1
800/10 - 1/10 = P
80 - 0.1Q = P
Total Revenue(TR) = PQ
TR = 80 - 0.1Q
MR = MC
where MC = $50
80 - 0.1Q = 50
Collecting like terms
80 - 50 = 0.1Q
30 = 0.1 Q
Divide both side by 0.1
Q = 300
Price would be
P = 80 - 0.1Q
P = 80 - 0.1(300)
P = $50
MC = 40
Producing Q units
Total Cost (TC ) = 40 * ( 300 )
= $12,000
Total profit
= TR - TC
= ( P * Q ) - $12,000
= ( $50 * 300 ) - $12,000
= $15,000 - $12,000
= $3,000
Changes caused by regulations
Contracted price = $70
Quantity = 100Units
TT’ = ( P * Q ) - TC
= ( 70 * 100 ) - ( 50 * 100 )
= $7,000 - $5,000
= $2,000
TT - TT’ = $ ( 3000 - 2000 )
= $1,000
If legislation is passed all profit would reduce by $1,000
Answer:
Current Price of the Share Stock is $ 37.86 (D)
Explanation:
Using dividend valuation method with a constant growth rate assumption, share price is calculated as : Po =D1/(Ke-g).
Where; Po ⇒Market Value excluding any dividend currently payable
D1= Do(1+g)⇒Expected dividend in one year's time
Ke =Required rate of return by shareholders
g= Dividend growth rate
<u>Calculation</u>
D1 = 5(1+0.06)= $5.3
Hence, Po= 5.3/(0.20-0.06)
Po=$37.86
The share price is expected to reflect the future expected stream of income i.e dividends and capital gains ,discounted at an appropriate cost of capital.
Some of the assumptions of dividend valuation method include but not limited to the following:
- it assumed that investors act rationality and in the same way ;
-the dividend either show growth or no growth;
-the discount rate used exceeds the dividend growth rate.
Answer: startup
Explanation:
The start up phase is when the entrepreneur puts their time effort and money the most, he or she has to come up with ideas and consistently implement them hence if the owner can decide if the the business opportunity is not for them at this stage because they will not be willing to through all that if they are not passionate
Answer: Latin america
Explanation: The following case relates to international management activities. The business and management styles of the organisations changes with the change in the culture of the country in which the business is to be done.
In Latin america, the word of mouth is considered to be more important than the paper contracts. The firms around the coutry wants to ensure that the other party is reliable. The dinner is the country usually happens late in 9AM and discussions is don on the dinner.
Hence from the above we can conclude that the correct answer is latin america.
