Answer: b. Marginal revenue is less than average revenue
Explanation:
Marginal revenue is the extra revenue received by selling one more unit of a good while Average revenue is the revenue generated on average by all units sold thus far.
If the monopolist has to reduce prices to sell more goods then it would mean that for every unit sold, the price would have reduced compared to the price of the last unit which translates to less revenue coming in per unit compared to the last unit.
On the other hand, on average, the higher prices of the earlier goods sold would keep the average revenue higher than the additional revenue (marginal revenue).
Answer:
Cree markets LED (light-emitting diode) bulbs that replace the traditional incandescent bulb. A CreeLED bulb consumes 85 percent less energy and lasts for 25,000 hours. Cree is an example of Option D, a business firm.
Explanation:
Organizations can be classified as profit organizations, non-profit organizations and government organizations.
Profit organizations are responsible to pay taxes, whereas non profit ones are exempted from paying tax.
Non profit ones are dependent on public sector who can fund them. These include hospitals, national charities and churches.
A government agency looks after the specific functions like intelligence agency.
The given example is of a business firm, which sells products for earning profits. It has replaced traditional bulbs and saves energy.
Answer:
The company should accept the special order.
Explanation:
The company has the capacity to produce 20,000 units and It is currently only producing 13,000 units.
The company can produce in addition of 7,000 units (more than the number of units from special order)
The revenue of special order: 6,500 x $62 = $403,000
Revenue of special order - Incremental cost of accepting the special order = $403,000 - $382,000 = $21,000 >0
The company gains $21,000 on special order => The company should accept the special order.
Answer:
DR Bad Debts Expense $11,750
CR Accounts Receivable $11,750
<em>(To record accounts receivable written off)</em>
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Explanation;
Direct method of writing off involves removing the bad debt directly from the Accounts Receivable account instead of using the Allowance for Doubtful debt account.