Answer:
DR Cash ..............................................................$ 176,000
CR Sales Revenue................................................................$149,600
CR Deferred Revenue..........................................................$26,400
Explanation:
Revenue should only be recorded when earned and as the 6 month technical support can be sold separately, it is revenue that has not be earned yet as the 6 months have not elapsed. This will therefore need to be recorded as Deferred revenue.
Sold alone, the revenue is more than when they are sold together so use the standalone price to find out the revenue when sold together by proportionality.
Sales revenue = 153,000/180,000 * 176,000
= $149,600
Deferred Revenue = 27,000/180,000 * 176,000
= $26,400
They benefit producers and hurt consumers
Answer:
A) price will increase and quantity increase.
Explanation:
An increase in demand means more customers are willing and can afford to buy a product. Holding the other factors constant, an increase in demand results in many potential buyers chasing very few goods. The competition for the few goods leads to an increase in their prices. The equilibrium point moves up the graph to a new higher position as a result of an increase in demand.
As per the law of supply, quantity supplied increases as prices rise. Profit motives drive all business establishments. As prices increase due to increased demand, suppliers will be motivated to supply more to take advantage of high prices.
Answer:
a. firms have different costs.
Explanation:
A market might have an upward-sloping long-run supply curve if
a. firms have different costs.
b. consumers exercise market power over producers.
c. all factors of production are essentially available in unlimited supply.
d. the entry of new firms into the market has no effect on the cost structure of firms in the market.
Answer:
The remaining part of the question is given below:
(Note that the subsidy can be granted to the education institutions or to the students directly or indirectly; for example, through low- interest student loans.)
a. P2-P0
b. P2-P1
c. P0-P1
d. P1
<u>Correct Answer:</u>
b. P2-P1
Explanation:
A pigouvian subsidy is a subsidy that is used to encourage behaviour that have positive effects on others who are not involved or society at large. <em>Behaviors or actions that are a benefit to others who are not involved in the transaction are called positive externalities.</em>
