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3 years ago

Economies of scale:

Business

1 answer:

gregori [183]3 years ago

5 0

Answer:

are achieved when a firm reduces its average cost of production as it produces more.

Explanation:

Economies of scale is reduction in the average cost as production increases due to the large size of the firm which makes it more efficient.

It is large firms that enjoy economies of scale.

Economies of scale can be achieved by buying supplies in large quantities. When firms buy in large quantities, they enjoy discounts which reduces their average cost. This is a form of internal economies of scale.

I hope my answer helps you.

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Suppose that the duopolists Carl and Simon face an inverse demand function for pumpkins of P = 400 - Q, where Q = Qs + Qc is the

Usimov [2.4K]

Answer:

the Cournot-Nash equilibrium, Simon's production is 82 units

Explanation:

The Cournot-Nash Equilibrium for Simon's production is calculated as follows:

$P = 400 - Q \\ \\ Q = Q_s + Q_c$

Reaction function of Carl is as follows:

Carl maximize profit at $HR_c = HC_c$

$TR_c = P*Q_c$

$TR_c = (400 -Q_s -Q_c)Q_c$

$TR_c = 400Q_c -Q_sQ_c -Q_c^2$

⇒ $HR_c = \delta TR_c/ \delta Q_c$

$HR_c =400 -Q_s -2 Q_c$

$C_c = 30 Q_c + Q_c^2$

⇒ $HC_c = \delta C_c/ \delta Q_c$

$HC_c =30+2Q_c$

Set $HR_c = HC_c$

$400 - Q_s - 2 Q_c = 30 - 2Q_c \\ \\ 400 - Q_s -30 = 2Q_c + 2Q_c \\\\(370 Q_s) = 4 Q_c \\ \\ Q_c = (370-Q_s)/4 \\ \\ Q_c = 92.5 - 0.25 Q_s \to Reaction \ function \ of \ Carl --- equation (1)$

Reaction function of Simon

Since Simon maximize profit at $HR_s = HC_s$

$TR_s = PQ_s \\ \\ TR_s = (400-Q_c -Q_s)Q_s \\ \\ TR_s = 400 Q_s - Q_cQ_s - Q_s^2$

$HR_s = \delta TR_s/ \delta Q_s$

$HR_s =400 - Q_c -2Q_s$

$C_s = Q_s^2$

$HC_s= \delta C_s/ \delta Q_s$

$HC_s=2Q_s$

Set $HR_s = HC_s$

$400- Q_c - 2Q_s = 2Q_s \\ \\ 400 - Q_c = 2Q_s+2Q_s \\ \\ 4Q_s = 400 - Q_c \\ \\ Q_s = (4000- Q_c)/4 \\ \\ Q_s = 100 -0.25 Q_c --- Reaction \ function \ of \ Simon \ -- equation (2)$

Substituting equation (1) into equation (2)

$Q_s =100 -0.25Q_c \\ \\ Q_s = 100 - 0.25(92.5-0.25 Q_s) \\ \\ Q_s = 100 -23.125 +0.0625Q_s \\ \\ (Q_s-0.0625Q_s) = 76.375 \\ \\ 0.9375 Q_s = 76.875 \\ \\ Q_s = 76.375/0.9375 \\ \\ Q_s = 82$

Thus; the Cournot-Nash equilibrium, Simon's production is 82 units

3 0

3 years ago

For each event listed below, identify the accounts that should be used to record the economic event and the dollar amount for th

creativ13 [48]

Answer: C $9,400,000 E $600,000; B $10,000,000

Explanation:

The Company Issued bonds worth $10,000,000 but only received $9,400,000 in cash.

This means that they issued the Bonds at a discount. With the discount being the difference between how much was issued and how much was received.

This discount will be sent to the Discount on Bonds Payable account.

The Cash received of $9,400,000 will be sent to the cash account.

The company will still have to pay the entire figure of $10,000,000 in bonds so the full amount will go to the Bonds Payable account.

The Journal Entry is thus,

DR Cash $9,400,000

DR Discount on Bonds Payable $600,000

CR Bonds Payable $10,000,000

8 0

3 years ago

Swifty Corporation purchased a machine for $66000 on July 1, 2020. The company intends to depreciate it over 8 years using the d

Lostsunrise [7]

Answer:

Depreciation expense= $7,612.5

Explanation:

Giving the following information:

Purchase price= $66,000

Salvage value= $5,100

Useful life= 8 years

First, we need to determine the depreciation expense for the whole year. We will use the following formula:

Annual depreciation= 2*[(book value)/estimated life (years)]

Annual depreciation= 2*[(66,000 - 5,100) / 8]

Annual depreciation= $15,225

For 2020:

Depreciation expense= (15,225/12)*6= $7,612.5

3 0

3 years ago

it is often said that managers often make decisions without all the necessary information. Why is this so?

Elena L [17]

Managers usually make decisions without all the necessary information because they are not aware of the alternatives that they've and aren't able to predict the consequences of the decision.

In management, decision-making is vital. Decision-making is important in the planning process. During planning, the manager decides on the goals that an organization wants to pursue.

In certain cases, a manager may not have all the required information regarding a particular issue but despite that still makes such decisions. Also, there are some decisions that require urgent attention, and delaying such decisions can further complicate such issues.

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brainly.com/question/9075718

8 0

3 years ago

Will Jones, LLP is a small CPA firm that focuses primarily on preparing tax returns for small businesses. The company pays a $50

xxMikexx [17]

Answer:

The company pays $ 500 yearly fee to use Mega Tax Software which is record as fixed costs. Fixed costs do not differ with the variation in the manufacturing levels. Conversely, the fixed cost per unit declines as manufacturing increases, as the same fixed costs are extent over more units. Also the fixed costs per unit rises as the production decreases. Therefore when the production level increased from 300 units to 500 units, the fixed costs per unit reduced and since the variable cost per unit is the same at $ 10 per unit regardless of the levels of production, the total cost per return declines from $ 11.67 to $ 11.

7 0

3 years ago