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Marizza181 [45]
3 years ago
14

The traditional view of monopolistic competition holds that this type of industrial structure is inefficient because a. more adv

ertising is needed to inform customers about product differences. b. consumers do not have enough choice among the product varieties available. c. firms do not operate at the output that minimizes average costs. d. there are too few firms to reach an efficient level of production.
Business
1 answer:
Elodia [21]3 years ago
5 0

Answer:

c. firms do not operate at the output that minimizes average costs.

Explanation:

Monopolistic competition is when suppliers sell products that are similar but not equal and they are not perfect substitutes. This type of market is inneficient because companies operate at a profit maximizing output that is less than the output where they have the minimum average cost. According to this, the answer is that the traditional view of monopolistic competition holds that this type of industrial structure is inefficient because firms do not operate at the output that minimizes average costs as they work with excess capacity with an output in which they can maximize their profit.

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A firm has a debt-to-equity ratio of .5 and a market-to-book ratio of 2. What is the ratio of the book value of debt to the mark
ahrayia [7]

Answer: 0.25

Explanation:

The The debt-to-equity ratio is calculated when the total liabilities of w company is divided a by the shareholder equity while the book-to-market ratio is used to know a company's value by comparing the book value of the company to its market value.

Since the firm has a debt-to-equity ratio of .5 and a market-to-book ratio of 2. The ratio of the book value of debt to the market value of equity will be:

= 0.5/2

= 0.25

5 0
3 years ago
A buyer purchased a new residence for $175,000. The buyer made a down payment of $15,000 and obtained a $160,000 mortgage loan.
Naily [24]

Answer:

Buydown, is the right answer.

Explanation:

This is a buydown mortgage arrangement because in the buydown financing technique the buyer tries to take lower interest rates in the initial year of the loan period. Moreover, some mortgage lenders provide buydown discounts or points as part of their promotion. Secondly, the builder pays the initial payment to the mortgage institution that results in the lower buyer’s payment.

3 0
3 years ago
Stormy Corporation has two service departments (S1 and S2) and two production departments (P1 and P2), and uses the step-down me
Marianna [84]

Answer:

E. Both S1's cost should be allocated (i.e., spread) over 140 employees and S2 should allocate a total of $390,000 to P1 and P2.

Explanation:

As S1 gives more service, So it would be allocated first

Here

S1 cost of $280,000 would be allocated to S2 P1 and P2 based on number  of employees

The total employees in S2 P1 and P2 is

= 20 + 50 + 70

= 140

And, the Cost to be allocated per employee is

= $280,000 ÷ 140

= $2,000

Now cost received by S2 is

= $2,000 × 20

= $40000

And, the cost received by P1 is

= $2,000 × 50

= $100,000

And, the cost received by P2 is

= $2,000 × $70

= $140,000

Now

S2 contains total cost of

= $350,000 + $40,000 (from S1)

= $390,000

So this would be allocated to P1 and P2 as S1 has already allocated  

Hence, option D is correct

3 0
3 years ago
Piedmont Hotels is an all-equity company. Its stock has a beta of 1.23. The market risk premium is 6.9 percent and the risk-free
never [62]

Answer:

The required rate of return for the project will be 13.087%

Explanation:

To calculate the required rate of return for the project, we must first calculate the required rate of return for the firm's equity. The required rate of return can be calculated using the CAPM or Capital Asset Pricing Model equation. The formula for required rate of return (r) under this model is,

r = rRf + Beta * rpM

Where,

  • rRF is the risk free rate
  • rpM is the risk premium on market

r = 0.027 + 1.23 * 0.069

r = 0.11187 or 11.187%

The discount rate that is usually used for an all equity firm is its required rate of return. Thus, the required rate of return for the project will be,

r = 0.11187 +  0.019

r = 0.13087 or 13.087%

5 0
3 years ago
A video-recording system was purchased 4 years ago at a cost of $37,000. A 5-year recovery period and DDB (Double Declining Bala
AysviL [449]

Answer:

The trade in value is higher than the book value by $ 205

Explanation:

Computation of Book value

In a double declining balance method of depreciation, the rate of depreciation is double the straight line rate and is depreciated on a declining balance.

Cost of Equipment                                                                            $ 37,000

Estimated useful life ( Recovery Period)                                             5 years

Straight Line Depreciation rate                                                            20 %

Double declining Method depreciation  rate                                      40 %

Cost                                                                                                     $ 37,000

Depreciation for year 1   at 40 %                                                        <u>$(14,800)</u>

Depreciable basis for year 2                                                              $ 22,200

Depreciation for year 2   at40 %                                                       <u>$ ( 8,880)</u>

Depreciable basis for year 3                                                              $  13,320

Depreciation for year 3   at 40 %                                                        <u>$ (5,328)</u>

Depreciable basis for year 4                                                               $   7,992

Depreciation for year 4   at 40 %                                                        <u>$    3,197) </u>

Depreciable basis for year 5                                                                $  4,795

The depreciable basis for year 5 is the net book value after 4 years

The trade value is                                                                                  $ 5,000

The trade in value is higher by                                                             $     205

8 0
3 years ago
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