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Zolol [24]
3 years ago
10

Consider a profit-maximizing firm in a competitive industry. Under which of the following situations would the firm choose to pr

oduce where MR = MC?
Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers.

a. Yes?/No? Minimum AVC < Price < minimum ATC.
b. Yes?/No? Price > minimum ATC.
c. Yes?/No? Price < minimum AVC
Business
1 answer:
Mandarinka [93]3 years ago
3 0

Answer:

Option (a) and (b) are considered or correct.

Explanation:

Under the following two conditions, a firm in a perfectly competitive market produces at a point where the marginal revenue is equal to the marginal cost:

(i) Minimum AVC < Price < minimum ATC : Yes

In this case, a firm may suffer a loss but it will be able to cover its minimum average variable cost. Hence, this firm continue operating in this market and if he shut down its operation then he may suffer a larger loss. Therefore, it chooses to continue operating under this market conditions.

(ii) Price > minimum ATC : Yes

In this case, the price received by the seller is greater than the minimum average total cost. Therefore, the firm is able to cover all of its cost of production and earning an economic profit. Hence, it obviously chooses to continue its operation.

The third option is not considered here because in this case, the firm won't be able to cover its variable cost.

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Selected transactions for Thyme Advertising Company, Inc. are listed here. Describe the effect of each transaction on assets, li
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Answer:

Explanation:

1. Issued common stock to investors in exchange for cash received from inventors  - Increase in assets (cash) and an increase in equity  (Capital)

2. Paid monthly rent  - The decrease in equity and decrease in assets (cash)

3. Received cash from customers when service was rendered  - Increase in  assets (cash) and an increase in  equity

4. Billed customers for services performed  - Increase in assets (Accounts Receivable) and an increase in equity

5. Paid dividend to stockholders  - The decrease in equity and decrease in assets (cash)

6.Incurred advertising expense on account  - Decrease in equity and an increase in liability (Accounts Payable)

7.Received cash from customers billed in  - Increase in the asset (cash) and decrease in the asset (Accounts Receivable)

8.Purchased additional equipment for cash  - Increase in the asset (Equipment) and decrease in an asset (cash)

9.Purchased equipment on account  - Increase in the asset (equipment) and an increase in liabilities (Accounts payable)

5 0
3 years ago
Which of the following is a step in the investment planning process?
dalvyx [7]
A.  You have to know how much risk you are willing to take in order to figure out what sort of investments will fit your needs.

b-d are not only wrong, but very poor strategies in general.
8 0
3 years ago
Cost of Goods Sold account is debited and Finished Goods Inventory is credited for A) purchase of goods on account. B) the sale
Firlakuza [10]

Answer:

B) the sale of goods to a customer.

Explanation:

When goods are sold to a customer, the cost of goods sold account is debited by the same value that the finished goods inventory is credited.

For example, suppose a company sells $1,000 worth of goods to a customer, and the sales price is $1,200. The customer pays by cash the full value of the goods. The journal entry would be:

Account                                    Debit           Credit

Cash                                         $1,200

Sales Revenue                                             $1,200

Cost of Goods Sold                $1,000

Finished Goods Inventory                           $1,000

7 0
2 years ago
A sharp downturn in the U.S. housing market reduced the income of many who worked in the home construction industry. A Wall Stre
Shalnov [3]

Answer:

Answer is explained in the explanation section.

Explanation:

If the wages of the Hispanics construction worker in America are less then, they will not have near as much money to send home to their relatives back in Mexico.

And if their families do not have as much as it use to be then they will not be able to buy near as much as they used to.

It means that if the construction workers don't get as much money as they used to then, neither they nor their families  will be able to spend as much as they use to which will obviously hurt each of their economies.

6 0
2 years ago
Bandar Industries manufactures sporting equipment. One of the company’s products is a football helmet that requires special plas
viktelen [127]

Answer:

1. 21,000 kg of plastic

2. $168,000

3. $3000 Unfavorable

4. Materials Price variance $9000 Favaorable

Materials Quantity variance $12,000 Unvaforable

Explanation:

1. Calculation to determine the standard quantity of kilograms of plastic (SQ) that is allowed to make 35,000 helmets

Using this formula

Standard quantity of kilograms of plastic (SQ) = Standard quantity required per helmet x Total no. of helmets

Let plug in the formula

Standard quantity of kilograms of plastic (SQ) = 0.60 kg x 35,000

Standard quantity of kilograms of plastic (SQ) = 21,000 kg of plastic

Therefore The standard quantity of kilograms of plastic (SQ) that is allowed to make 35,000 helmets is 21,000 kg of plastic

2. Calculation to determine the standard materials cost allowed (SQ X SP) to make 35,000 helmets

Using this formula

Standard materials cost allowed (SQ X SP) = Standard quantity required per helmet x Standard cost per kg x Total no. of helmets

Let plug in the formula

Standard materials cost allowed (SQ X SP)= 0.60 x $8 x 35,000

Standard materials cost allowed (SQ X SP)= $168,000

Therefore The standard materials cost allowed (SQ X SP) to make 35,000 helmets is $168,000

3. Calculation to determine the materials spending variance

First step is to calculate the Materials Price variance

Using this formula

Materials Price variance = (AQ × AP) - (AQ × SP)

Let plug in the

Materials Price variance= $171,000 - (22,500 x $8)

Materials Price variance= $171,000 - 180,000

Materials Price variance= -$9,000

= $9000 Favaorable

Second step is to calculate the Materials Quantity variance using this formula

Materials Quantity variance = (AQ × SP) - (SQxSP)

Let plug in the formula

Materials Quantity variance=

Materials Quantity variance= 180,000 - $168,000

Materials Quantity variance=$12,000

Materials Quantity variance= $12,000 Unvaforable

Now let calculate the Materials spending variance using this formula

Materials spending variance = Price variance + Quantity variance

Let plug in the formula

Materials spending variance= -$9,000+ $12,000 Materials spending variance= $3,000

Materials spending variance= $3000 Unfavorable

Therefore Materials spending variance is $3000 Unfavorable

4. Calculation to determine the materials price variance and the materials quantity variance

Calculation for the Materials Price variance Using this formula

Materials Price variance = (AQ × AP) - (AQ × SP)

Let plug in the formula

Materials Price variance= $171,000 - (22,500 x $8)

Materials Price variance= $171,000 - 180,000

Materials Price variance= -$9,000

Materials Price variance= $9000 Favaorable

Therefore Materials Price variance is $9000 Favaorable

Calculation to determine Materials Quantity variance using this formula

Materials Quantity variance = (AQ × SP) - (SQxSP)

Let plug in the formula

Materials Quantity variance= = 180,000 - $168,000

Materials Quantity variance=$12,000

Materials Quantity variance= $12,000 Unvaforable

Therefore Materials Quantity variance is $12,000 Unvaforable

4 0
3 years ago
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