Answer:
The answer is: Variable inflation is associated with high transaction costs
Explanation:
Inflation happens when the general prices in an economy rise, so the currency loses purchasing power.
When inflation rises too much (a little inflation, i.e. 1-2% is good) then both businesses and the general public will tend to have less money on their accounts and try to invest on assets that yield them a return. But when they need their money, they have to go through a series of financial transactions from non liquid assets (e.g. bonds, etc.) to liquid accounts (e.g. check account) or vice-versa.
Answer:
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From the information provided, the profit-maximizing level of output will be 5 units (Option C)
<h3>What is a pure monopolist?</h3>
A market structure known as a pure monopoly occurs when there is only one supplier of a product, and there are no reasonably priced alternatives. Pure monopolies are not common.
<h3>What is the explanation for the above?</h3>
When marginal cost and marginal revenue are equal, a monopolist produces that level of output (MC=MR). This is the output that maximizes profit.
If MC > MR, then the monopolist creates an output level where the most recent output costs less than it generates income.
To put it another way, the monopolist creates the final output when marginal revenue exceeds marginal cost.
Because it will cut into the monopolist's profits, the company won't produce a good where the marginal cost is higher than the marginal revenue.
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Full Question:
Answer the question on the basis of the provided demand and cost data for a pure monopolist.
The profit-maximizing level of output will be
A) 4 units.
B) 7 units.
C) 5 units.
D) 6 units.
Answer:
The Journal entries are as follows:
(a) On August 2,
Stock Dividends A/c (1,500,000 × $70 × 4%) Dr. 4,200,000
To Stock dividend distributable (1,500,000 × $40 × 4%) 2,400,000
To Paid in Capital in excess of par- Common stock 1,800,000
(To record the stock dividend)
(b) On September 15,
No entry required
(c) On October 8,
Stock Dividend distributable A/c Dr. $2,400,000
To Common stock $2,400,000
(To record the stock dividend issued to stockholders)
