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xenn [34]
3 years ago
15

The equilibrium price of a guidebook is $35 in the perfectly competitive guidebook industry. Our firm produces 10,000 guidebooks

for an average total cost of $38, marginal cost of $30, and average variable cost of $30. Our firm should:a) raise the price of guidebooks, because the firm is losing money.b) keep output the same, because the firm is producing at minimum average variable cost.c) shut down, because the firm is losing money.d) produce more guidebooks, because the next guidebook produced increases profit by $5.
Business
1 answer:
natali 33 [55]3 years ago
3 0

Answer:

d) produce more guidebooks, because the next guidebook produced increases profit by $5.

Explanation:

A perfectly competitive industry is characterised by many buyers and sellers of homogenous goods and services. There are no barriers to entry or exit of firms. In the long run, firms earn zero economic profit.

Profit is maximised where marginal revenue/ price is equal to marginal cost.

In this question, marginal revenue ($35) is greater than marginal cost ($30), so, the firm isn't maximising profit and they should increase production.

A firm should shutdown when average variable cost is greater than price.

I hope my answer helps you

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Why is it important to start saving for retirement early?
forsale [732]

Answer:

A

Explanation:

Saving early will allow you to gain more money because your interest will build over time.

4 0
3 years ago
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PackMan Corporation has semiannual bonds outstanding with nine years to maturity and the bonds are currently priced at $754.08.
Alja [10]

Answer:

b. 8.225%

Explanation:

The rate formula will be used to solve this question.

Please note that the NPER represents the time value.

Where;

Present value is $754.08

Let's assume that the face value is $1,000

PMT= 1,000 x 7.25% ÷2

=$36.25

NPER= 9 years x 2

= 18 years

The formulae is therefore

Rate(NPER,PMT,-,PV,FV)

The value of the present value is negative.

a. The pretax would therefore be 11.75%

b. After tax cost of debt would be ;

Pretax cost of debt x (1 - tax rate)

11.75% x (1 - 30%)

11.75% x (1 - 0.03)

=8.225%.

4 0
3 years ago
Marigold Company discovered the following errors made in January 2022.
lys-0071 [83]

Answer:

A. Reversals entry

1. Dr Cash 900

Cr Equipment 900

Correct entry

Dr Wages and salaries 900

Cr Cash 900

B.

2. Dr Cash 5850

Dr Service revenue 650

Cr Account payable $6,500

3. Dr Accounts payable 360

Cr Equipment 360

Explanation:

A. To Correct the errors by reversing the incorrect entry and Preparation of the correct entry.

Reversals entry

1. Dr Cash 900

Cr Equipment 900

Correct entry

Dr Wages and salaries 900

Cr Cash 900

B. To Correct the errors without reversing the incorrect entry

2. Dr Cash 5850

($6500-650)

Dr Service revenue 650

Cr Account payable $6,500

3. Dr Accounts payable 360

(510-150)

Cr Equipment 360

4 0
2 years ago
A company purchased 300 units for $60 each on January 31. It purchased 150 units for $25 each on February 28. It sold a total of
Daniel [21]

Answer:

Weighted-average inventory costing method Ending Inventory = $ 9666.67= $ 9667

Explanation:

Date           Particulars       Units   Unit Cost        Total Cost

January 31  Purchases          300             $ 60        $ 18,000

February 28   Purchases       150             $ 25          $3750

Total                                       450                               $ 21,750

Weighted-average inventory costing method=  Total Cost/ Total Units=

                                    $ 21,750/450= $48.33 purchase price per unit

Sales              250 units       at     $ 70    =      $ 17500

Ending Units =  Purchases-Sales = 450-250= 200

Weighted-average inventory costing method Ending Inventory = $ 9666.67

200 units at 448.33=  $ 9666.67= $ 9667

3 0
3 years ago
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Hich best explains how the law of demand affects consumers?
Anuta_ua [19.1K]

Answer:

It helps consumers tell producers when prices are too high.

Explanation:

The law of demand affirms that an increase in price results in reduced demand. It means that when prices increase, consumers will buy fewer quantities of a product or service. The law of demand shows the relationship between price and the quantity of a product consumers are willing to buy in the market.

Consumers can communicate with producers through the volume of products purchased. When the quantity purchased is low, producers will know the set prices are high.

8 0
3 years ago
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