Price is taken to be a given by an individual firm selling in a purely competitive market because each seller supplies a negligible fraction of total market.
Purely competitive market refers to a marketing situation in which there are a large number of sellers of a product which cannot be differentiated selling a standardized product and therefore, no single firm has a significant influence on the product price. It is characterized, furthermore, by ease of entry for new companies into the market and perfect market information. Hence, the sellers in such a market are considered to be price takers. Examples of purely competitive market are agricultural products such as wheat or corn.
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Based on the sales revenue that the ice cream manufacturer got and the cost of goods sold, the total gross profit on ice cream sales is $300,000.
<h3>How is the total gross profit calculated?</h3>
This can be found as:
= Sales revenue - Cost of goods sold
Sales revenue:
= 200,000 x 4.70
= $940,000
Cost of goods sold:
= Total production cost / Total units produced x Units sold
= 665,600 / 208,000 x 200,000
= $640,000
Gross profit:
= 940,000 - 640,000
= $300,000
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Answer:
C
Explanation:
The economists would disagree with this policy because the opportunity cost of zero pollution is much higher than its benefit. The industries involved may have to stop their industrial activities out-rightly or temporarily until they come up with other ways of production which may bring unemployment, reduction in tax paid to government among others.
Answer:
$15,850
Explanation:
Particulars Amount
Sales revenues, each year $40,000
Less : Depreciation $10,000
Less : Other operating costs <u>$17,000</u>
EBIT $13,000
Less : Interest expense <u>$4,000</u>
EBT/PBT $9,000
Less: Tax at 35% <u>$3,150 </u> ($9,000*35%)
PAT $5,850
Add: Depreciation <u>$10,000</u>
Cash flow after taxes <u>$15,850</u>
