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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.

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What is the most acceptable and easy way to revise a budget to allow for the purchase of a new couch? Cancel renters' insurance.
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cook dinners at home instead of going out to eat

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3 years ago
Bi-Lo Traders is considering a project that will produce sales of $56,300 and have costs of $31,700. Taxes will be $5,500 and th
Kruka [31]

Answer:

Project's Operating cash inflow is $16,500

Explanation:

Operating cash flows are cash inflow and outflow generated from to day to day business activities. All the cash flows needed to operate the business smoothly.

Operating Cash flows from indirect method is calculated by adding non cash items in net income and any other working capital adjustment to the cash flows.

Net Income = Sales - Costs - depreciation - Taxes = $56,300 - $31,700 - $3,400 - $5,500 = $15,700

because the depreciation is an non cash expense so, it will be added back to the net income for the calculation of Net operating cash flows. Outlay in Net working capital will reduce the net operating cash flow, so it will be deducted.

Net Operating cash flow = $15,700 + $3,400 - $2,600 = $16,500

4 0
4 years ago
In a perfectly competitive​ market, if one seller chooses to charge a price for its good that is slightly higher than the mark
Bogdan [553]

In a perfectly competitive market, if one seller chooses to charge a price for its good that is slightly higher than the market price, then it will <u>lose all or almost all of its customers</u>

<h3>What is a perfectly competitive market?</h3>

A hypothetical market system is referred to as perfect competition. There are no monopolies under a scenario of perfect competition. A few essential traits of this type of structure include:

  • All businesses sell the same thing (the product is a commodity or homogeneous).
  • Every company is a price taker (they cannot influence the market price of their products).
  • Price changes are unaffected by market share.
  • Buyers have complete or perfect knowledge of the product being offered and the prices each company is asking (in the past, present, and future).
  • Labor and capital resources are completely mobile.
  • Companies are not charged to enter or leave the market.

To learn more about perfectly competitive market with the given link

brainly.com/question/13961518

#SPJ4

8 0
2 years ago
Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the N
ExtremeBDS [4]

Answer:

1.- 35,000 helment x 0.6 kilograms = 21,000 STD quantity

2.- 21,000 kilograms x $8 per kilogram = $168,000

3.- 9,000 F

4.- 12,000 U

Explanation:

(standard\:cost-actual\:cost) \times actual \: quantity= DM \: price \: variance

std cost  $8.00

actual cost  $7.60

quantity 22,500

(8.00 - 7.60) \times 22,500 = DM \: price \: variance

difference  $0.40

The actual cost for each kilogram is lower than expected. This means the copamny saved cash in the purchase. This variance is favorable.

saved 0.40 per kilograms x 22,500 purchased

price variance  $9,000.00

(standard\:quantity-actual\:quantity) \times standard \: cost = DM \: quantity\: variance

std quantity 21000.00

actual quantity 22500.00

std cost  $8.00

(21,000 - 22,500) \times 8 = DM \: quantity\: variance

difference -1500.00

The actual quantity was higher than expected, this variance will be unfavorable

1,500 extra kilograms x $8 each =

quantity variance  $(12,000.00)

8 0
3 years ago
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