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mash [69]
3 years ago
8

The price of oil in international markets has dropped stunningly 60% in the past twelve months. Among the factors mentioned behi

nd this drastic fall is the millions of barrels of oil produced in the US called shale oil and analyze:
a. The market struc ture for oil industry.
b. The supply and demand for oil in that market structure.
c. The pricing of oil at the presence of OPEC and the role of Speculators.
d. Why shale oil is a substitute for oil and explain the news in regard to the Cross elasticity of demand.
Business
1 answer:
IRISSAK [1]3 years ago
4 0

Answer:

a. The market structure for oil industry.

The market structure is monopolistic competition: there are many competitors, that hold some market power, but not as much as in oligopoly. The good that is offered is not as homogenous as in agricultural markets, and this is the reason why it is not a perfect-competition structure either.

b. The supply and demand for oil in that market structure.

Supply and demand is determined more or less freely in the market. Producers hold some market power so they charge a price that is a bit higher than the marginal cost, which would be the price in a perfect competition structure.

Consumers also have power in the demand curve because they have a fair number of options.

c. The pricing of oil at the presence of OPEC and the role of Speculators.

The OPEC forms an oligopoly, however, not all countries that produce oil are members of the OPEC, and this is why the market structure as a whole is not an oligopoly, but monopolistic competition.

Speculators can drive prices, but their influence is marginal in comparison to consumers as a whole.

d. Why shale oil is a substitute for oil and explain the news in regard to the Cross elasticity of demand.

Shale oil is a substitute because it offers the same service: providing energy, and serving as a chemical component of many products.

As for the cross elasticity of demand, this means that when the price of oil increases, the demand for shale oil increases, because people flock to the substitute.

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Answer:

Explanation:

Since in the question the shares are repurchased which impact the accounting equation in a negative manner

Accounting equation would be

Total assets = Total liabilities + Stockholder equity

The assets are decreased as it reduces the balance of cash account as well as it reduced the stockholder equity also by the same amount

4 0
3 years ago
Worker A is more effective than Worker B. Both workers become less effective as their workloads increase. Both workers are paid
sineoko [7]

Answer: False

Explanation:

Question mentions that even though Worker A and Worker B are both paid the same salary and become less effective as their workload increase, Worker A is still more effective than Worker B.

The optimal allocation therefore would be one where Worker A get more of the 200 units of production than Worker B because they would be able to produce more as they are more effective.

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3 years ago
The following information applies to the questions displayed below) Serendipity Sound, Inc., manufactures and sells compact disc
OlgaM077 [116]

Answer:

  1. $25.50
  2. 90,000 units
  3. 140,000 units

Explanation:

1. Current contribution margin ratio

= (Selling price - Variable cost)/ Selling price

= (25 - 19.8) / 25

= 0.208

New Direct labor = 5.0 * ( 1 + 8%)

= $5.40

New variable cost = 19.8 + 0.4 = $20.20

To maintain 0.208

0.208 = (Selling price - 20.20) / Selling price

0.208 * Price = Price - 20.20

0.208Price - Price = -20.20

-0.792Price = -20.20

Price = -20.20/-0.792

Price = $25.50

2. Breakeven = Fixed Cost / Contribution Margin

Contribution Margin = Selling price - Variable cost

= 25 - 19.8

= $5.20

= 468,000/5.2

= 90,000 units

3. To earn $260,000;

= (Fixed Cost + 260,000) / Contribution margin

= (468,000 + 260,000) /5.2

= 140,000 units

6 0
3 years ago
Cambridge Co. uses the allowance method. During January 2019, Cambridge writes off a $640 customer account balance when it becom
yan [13]

Answer:

The correct answer is option (a).

Explanation:

According to the scenario, computation of the given data are as follows:

Allowance method shows that, if account is written off, then Accounts receivable account gets credited and Allowance accounts gets debited.

Here, both accounts are or balance sheet items.

So, it will not affect any expenses account.

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What are examples of short-term goals? Check all that apply.
Zolol [24]

Answer:

the right answer is Aden wants to get a summer job during his school vacation.

Explanation:

short-term goals are those that are aimed at meeting monthly

6 0
3 years ago
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