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Advocard [28]
3 years ago
5

Explain how incentives and the limited role of government function in a free enterprise system.

Business
1 answer:
Degger [83]3 years ago
3 0

Answer:

The government has two major roles;

a. The role of a rule maker.

b. The role of an umpire.

Explanation:

a.

A free enterprise system is an economic model where the prices and quantities produced are determined by the market rather than the government. The government usually has limited or no control on the market forces. In other words, a free enterprise system is an ideology where the market is majorly controlled by private businesses. The foundation for free markets are; voluntary trade, private ownership of property and competition in bidding. However, a government controlled economy usually has the following properties, namely; all property is publicly owned, trade is coerced and there is limited competitive bidding. Even though the government has a limited role in a free enterprise system it still has a role in allowing individuals to operate freely in the market. The roles of the government are; rule maker and umpire.

b.

In a free enterprise system, individuals are allowed to do their transactions without any restrictions. Even though individuals are free to operate, there needs to be rules to make sure that the transactions are in deed free. This is where the government comes in to enforce the laws that govern the smooth running of a free enterprise system. The government's role as an umpire means that the government has the authority to solve disputes resulting from different interruptions of the law.

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A major one is the increase in globalization.

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4 0
3 years ago
Which of the following statements is true if total fixed costs decrease while the sales price per unit and variable cost per uni
Trava [24]

Answer:

D. The breakeven point decreases.

Explanation:

Breakeven point of a business is defined as the point where it's total cost and total revenues are equal, at this point there is no gain or loss. Hen revenue is above this point profit is made, and when revenue is below this point there is loss.

The formula for break-even is

Breakeven point= Total fixed cost/(Sales price per unit- Variable cost per unit)

Since sales price and variable cost is constant, let's say

(Sales price per unit- Variable cost per unit)= constant (k)

So when we cross-multiply in the formula

Breakeven* k= Total fixed cost

It shows that Breakeven point is directly proportional to Total fixed cost.

So a reduction in Total fixed cost will result in a reduction in Breakeven point.

3 0
3 years ago
Industries that sell products to seniors, such as the eyeglass industry and the hearing aid industry, are benefiting from the ag
disa [49]

Answer:

Environmental trend

Explanation:

<em>An environmental trend is the influence of the combination of internal and external factors (environment) over the business' operating system.</em> These factors can be clients, suppliers, competition, market, law, technology, etc. In the question given the factor that is influencing are the clients (seniors).

I hope you find this information useful and interesting! Good luck!

7 0
3 years ago
Nescafe coffee is marketed using different coffee blends and promotional campaigns to match consumer preferences in different co
Alexandra [31]
The answer is dual adaption marketing strategy. It is the adaptation of both the good and the communications to a local marketplace. For instance, when a business modifies their marketing communications for a local market, the method is recognized as communications adaptation.
4 0
3 years ago
g Phoenix industries has pulled off a miraculous recovery. Four years ago it was near bankruptcy. Today, it was announced a $1 p
UNO [17]

Answer:

Market Share price $ 31,12

Explanation:

The price of the stock will be the same as the present value of their dividends:

Year        Dividend   Presnet Value

First year $1,00 $ 0,8621

Second   $2,00 $  1,7241

Third       $3,00 $  2,5862

Total Value         $  5,1724

Now, we solve for the horizon value

3 x (1.08) / (0.16 - 0.08) = 40,50

And, as this is three year ahead we also discounted like the other dividends:

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity  40,50

time   3,00  

rate  0,16

\frac{40,5}{(1 + 0,16)^{3} } = PV  

PV   25,95  

And last, we add up the horizon with the other dividends:

5.17 + 25,95 = 31,12

3 0
3 years ago
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