1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
stealth61 [152]
3 years ago
9

A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in the economy is 5 percent. Thi

s firm is earning $5.50 on every $50 invested by its founders.
a. What is its percentage rate of return? 11 percent.
b. Is the firm earning an economic profit? Yes If so, how large? 6 percent.
c. Will this industry see entry or exit? Entry
d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?
Business
1 answer:
Nadya [2.5K]3 years ago
4 0

Answer: The answers are given below

Explanation:

a. What is its percentage rate of return?

From the question, we are told that the firm is earning $5.50 on every $50 invested by its founders. The percentage of return will now be:

= $5.50/$50 × 100%

= 0.11 × 100%

= 11%

b. Is the firm earning an economic profit? If so, how large?

The economic profit will be the difference that exists between the percentage of return which is 11% and the normal rate of profit which is 5%. This will be:

= 11% - 5%

= 6%

The firm is earning economic profit of 6%.

c. Will this industry see entry or exit?

There will be entry into the industry. This is because the percentage of return which is 11% is greater than the normal rate of profit which is 5%.

d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?

The rate of return earned by firms in this industry once the industry reaches long-run equilibrium will be 5% which is the normal rate of profit in the economy.

You might be interested in
The employees who work for a business are called ____.
GrogVix [38]

Answer:

Human resources.

Explanation:

Human resources. are the employees who work for a business

6 0
2 years ago
On October 1, 2020 Bonita Industries issued 5%, 10-year bonds with a face value of $8090000 at 103. Interest is paid on October
V125BC [204]

Answer:

a credit of $242700 to Premium on Bonds Payable

Explanation:

Based on the information given The journal entry to record the issuance of the bonds would include a credit of $242700 to Premium on Bonds Payable which is calculated as:

Premium on Bonds Payable=[($8090000*103%)-$8090000

Premium on Bonds Payable=8,332,700-$8090000

Premium on Bonds Payable=$242700

Therefore The entry to record the issuance of the bonds would include a credit of $242700 to Premium on Bonds Payable

6 0
2 years ago
If omar company applies overhead to jobs on the basis of direct labor hours and job 3 took 120 hours, how much overhead should b
telo118 [61]
You multiply 3 by 120 to get $360 the answer is b. $360
6 0
3 years ago
Ordinary repairs meet all of the following criteria except: Multiple Choice Are expenditures to keep an asset in good operating
spin [16.1K]

Answer:

The correct answer is letter "B": Extend the useful life of an asset beyond its original estimate by several years.

Explanation:

Ordinary repairs refer to routine maintenance that equipment and machinery need to work over its estimated useful life. <em>It does not aim to extend the life of the equipment but helps meeting the estimated time a company plans to use those assets.</em> In accounting terms, ordinary repairs demand to record a debit to an expense account and a credit to a cash account.

7 0
3 years ago
Current liabilities are obligations that are reasonably expected to be paid from Existing Creation of Other Current Assets Curre
Alex73 [517]

Answer:

The answer is option C) Yes No

Explanation:

Current liabilities are obligations that are reasonably expected to be paid from Existing Creation of Other Current Assets and not current liabilities.

This is because, Current liabilities are short term liabilities due within a year. They include accounts payable, short term debt and overdraft. This means that payment can only be generated by current assets.

Current assets are also short term assets with a life span of on year. They include accounts receivable an cash.

Therefore, Yes, Current liabilities are obligations that are reasonably expected to be paid from Existing Creation of Other Current Assets.

And No, Current liabilities are obligations that are not expected to be paid from Existing Creation of Other Current Liabilities.

5 0
3 years ago
Other questions:
  • XYZ, Inc., has issued 11 million new shares of stock. An investment bank agrees to underwrite these shares on a best efforts bas
    10·2 answers
  • Which statement is false?
    7·1 answer
  • To print the Adjusted Trial Balance, select: Multiple Choice Company Center &gt; Accountant &amp; Taxes Company Center &gt; Comp
    13·1 answer
  • Anthony has purchased a new shipment of 50 Bluetooth earbuds that he plans to sell for $99.99 each. The manufacturer informs Ant
    13·1 answer
  • The competitive moves and business approaches a company's management uses to grow the business, attract and please customers, co
    7·1 answer
  • Q 7.5: a small business owner has two employees but each employee has a separate cash register drawer. this situation can be vie
    8·1 answer
  • All oligopoly models share several assumptions. Which of the following is among them?
    5·1 answer
  • The price of a stock on February 1 is $48. A trader sells 200 put options on the stock with a strike price of $40 when the optio
    11·1 answer
  • Roddy Rich is a very astute entrepreneur and wants to invest in an asset that will require high maintenance with disregard for s
    8·1 answer
  • how would you describe in three sentences the posible product or service you will propose for need in your community.​
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!