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Anarel [89]
3 years ago
5

Joss is a marketing consultant Iris and Daphne are potential customers interested in commissioning Joss to undertake a market su

rvey and compile the findings in a report. Iris is willing to pay $500 for the service while Daphne is willing to pay $800. Suppose that the opportunity cost of Joss's time is $1, 200. Assume that Iris and Daphne do not know each other. Which of the following statements is true?
(A) Joss should charge each customer $600, that way he will earn his opportunity cost and it will be fair to both Iris and Daphne.
(B) Joss should charge Iris $500 and Daphne no more than $700, that way he earns his opportunity cost and there is no loss in economic surplus.
(C) Joss should charge Iris $500 and Daphne $800, that way economic surplus is maximized.
(D) Joss should charge Iris $500 but charging Daphne $800 is unfair because it allows Joss to earn more than his opportunity cost.
Business
1 answer:
Norma-Jean [14]3 years ago
8 0

Answer:

(C) Joss should charge Iris $500 and Daphne $800, that way economic surplus is maximized.

Explanation:

Assuming information asymmetries in the market, and Iris and Daphne are incapable of compare their willingness to pay against the average price of the market for this type of service, C is true since Joss maximize the economic surplus by increasing his productivity using the time better than his opportunity cost.

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Comfort Cords produces curtain cords. In the process of manufacturing those cords, it also produces hair ties which are sold sep
hoa [83]

Answer:

$609,000

Explanation:

The revenue in June for  Comfort Cords is the sum of the revenue from cords and hair ties.

The revenue from each is the product of the unit selling price and the quantity sold.

= 50000 * $12 + 9000 * $1

= $600,000 + $9000

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3 0
3 years ago
Cleveland Corporation acquired a machine for $42,000 and has recorded depreciation for two years using the straight line method
dsp73

Answer:

The book value of the machine at the end of year 2 is $35,000

Explanation:

Straight line method depreciates the asset on its useful life after deducting salvage value from the cost of the asset.

Depreciation per year = ( Cost of Machine - Residual Value ) / Useful life

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Depreciation per year = $3,500 per year

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Book value of machine at the end of year 2 = $42,000 - $7,000

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7 0
3 years ago
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Answer:

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Bill = 5/5

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