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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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$4062

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Calculate the percentage rate management fees on the following: $575 adjusted per-unit fee, 50 total units, $600,000 annual gros
arlik [135]

Answer:

19.1% management rate.

Explanation:

Adjusted fee charge per unit = 575

Adjusted fee charge for total unit of product = 575 * 50 = $28750

Net after feel charge on goods = 600000 - 28750 = $571250

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Total management fee per year = $114437.5

Percentage rate management fee = (114437.5/600000) *100

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8 0
3 years ago
What is the total cost of a 15-year mortgage if the monthly payment is $1718.70? A. $447,585.60 B.$281.683.80 C. $309, 366.00 D.
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Answer:

Total Cost = $309,366

Explanation:

Given:

Number of year = 15 year

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Find:

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3 0
3 years ago
Burton Company uses a normal costing system. The company uses direct labor-hours as the cost-allocation base. The following info
densk [106]

Answer:

the allocated direct manufacturing overhead costs of Job 56 is $25

Explanation:

Overheads in manufacturing process are allocated to jobs or products using cost drivers or surrogates.

<em><u>First Step : Determine the Pre-determined Overhead rate</u></em>

Pre-determined Overhead rate = Budgeted Overheads / Budgeted Activity

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<em><u>Step 2 : Determined the Amount of Overhead allocated to Job 56 based on labor hours utilised</u></em>

Overhead for Job 56 = Pre-determined Overhead rate × Hours Used

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3 0
3 years ago
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solniwko [45]

Answer:

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Giving the following information:

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The labor productivity is calculated based on the number of units made divided by the amounts of hours required:

Labor productivity= 1,000/425= 2.35 tires per hour of work

8 0
2 years ago
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