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Karo-lina-s [1.5K]
2 years ago
11

The dry cleaning industry is in monopolistic competition. In the short​ run, the​ profit-maximizing price is​ $10 per item and t

he average total cost is​ $6 per item. In the long​ run, the​ profit-maximizing price is​ $8 per item. In the long​ run, what is the economic profit of a firm in the dry cleaning​ industry?
Business
1 answer:
vitfil [10]2 years ago
4 0

Answer:

$ 0

Explanation:

Under monopolistic competition, firms reach equilibrium in the long-run: this equilibrium is a point in which the marginal cost of producing one additional unit of ouput are the same as the marginal revenue from the sale of the same additional unit of output.

In other words, in the long-run, firms under monopolistic competition can only break-even, they do no obtain economic profits.

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The balance between supply and demand is known as the market equilibrium.

The supply and demand are determined through the price mechanism in a free market. Such as if the goods or services are bought more frequently then their prices will go up and vice versa.

This means that the price mechanism helps to determine what goods are to be produced. In the case where the demand for good increase will result in price go up and will ultimately result in producers supplying more of those goods.

This system of price helps to scale the point where competing demands may be weighed by the consumer or producer requirements.

However, the movement towards the price equilibrium and the resulting balance between the supply and demand is known as the market equilibrium.

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2 years ago
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Some employees at a clothing manufacturer investigate pay rates on Salary and learn that the company has been paying them signif
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In this case, the most likely reason for this is The employees will conclude that there must be regional differences in pay.

<h3>What is a Pay Difference?</h3>

This refers to the discrepancy that exists when a person is paid a different amount to another person who is performing the same or similar work and can be affected by things like location, etc.

Hence, we can see that based on the fact that the employees of the cloth store make an investigation into their pay rates and find out that there is a price discrepancy that is higher than the national average, they would conclude that there must be regional differences in pay.

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6 0
2 years ago
Home Realty, Incorporated, has been operating for three years and is owned by three investors. J. Doe owns 60 percent of the tot
nordsb [41]

Answer:

Net Income for the year is $23,175

Explanation:

The Company's income Statement is prepared below. In relation to the following please note that:

  • Total Revenue is considered Section A while Total Expense is Section B and the Net Income is the difference of the same (A - B).

<u>Income Statement on December 31st:</u>

HOME REALTY, CORPORATION

Income statement

For period ended December 31st

Revenue                                           $

Sales Revenue                             166,000  

Other Revenue                                   -  

Total Revenue (A)                             166,000  

Expenses:                                    $

Salaries and Wages Expense             97,000  

Interest Expense                                6,300  

Advertising Expenses                        9,025  

Income Tax Expense                        18,500  

Dividends                                        12,000

Total Expenses (B)                        142,825  

Net Income (A-B)                                 $23,175

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2 years ago
Based on the following adjusted trial balance: Peak Corporation Adjusted Trial Balance As of December 31, 2018 Debit Credit Cash
ivanzaharov [21]

Answer:

Determine the amount that will be reported as retained earnings on the post-closing trial balance.

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Explanation:

Cash__________________800  

Account Receivable______ 200  

Inventory_______________2500  

Building________________30000  

Accunulated depreciation_______________ 3000

Notes payable_________________________ 500

Common stock_________________________21000

Retainend Earnings_____________________ 5000

Dividens________________1000  

Revenue_____________________________ 7000

Selling and administration_ 1000  

Insurance expense_______ 1000  

                                       36500            36500

 

 

Retainend earnings______ 1000 26000

Retainend earnings initial_________ 25000

 

Net income_____________2000____7000

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Retainend earnings final___________30000

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An effect of the Sarbanes-Oxley Act of 2002 was to reduce the accounting profession’s level of self-regulation.

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