Answer:
The firm should increase output and reduce price
Explanation:
For a monopolist, there can be one of the following three scenarios at a time point in time:
Scenario one, MR = MC: For a monopolist, profit is maximized at the point where marginal revenue (MR) is equal to to marginal cost (MC), i.e. where MR = MC.
Scenario two, MR < MC: But when the MR < MC, it indicates that the monopolist is currently producing a higher quantity of output and it is not maximizing profit. In order to maximize profit, the monopolist has to reduce output until MR = MC.
Scenario three , MR > MC: But when the MR > MC, it indicates that the monopolist is currently producing a lower quantity of output and it is not maximizing profit. In order to maximize profit, the monopolist has to increase output until MR = MC. Also, the monopolist has to reduce price in order to sell the increased quantity of output.
From the question, the monopolist falls into scenerio three as MR > MC, i.e. $45 > $35. Therefore, the monopolist should increase output until MR = MC and reduce price in order to maximize profit.
The answer is Corporation. Corporations is a legal entity of a group of investors/shareholders as governed by the Securities and Exchange Commission. In the event of shortage of capital, the shareholders votes and agrees to sell some stocks in order to gain more capital.
Answer:
The expected rate of return is 8.65%
Explanation:
The expected return on a stock can be calculated by multiplying the return in each scenario by the probability of that scenario. This will provide the expected value of the return based on all these scenarios. Thus, the rate of return is,
Rate of return = rA * pA + rB * pB + rC * pC
Where,
- r represents the return in each scenario
- p represents the probability of each scenario
The probability of normal state is = 1 - 0.45 - 0.05 = 0.5
Rate of return = 0.13 * 0.45 + 0.06 * 0.5 + (-0.04) * 0.05
Rate of return = 0.0865 or 8.65%
Answer:
The correct answer is letter "A": Brazil only.
Explanation:
Comparative advantage is the ability of an organization or individual to produce at lower opportunity costs. This is achieved by introducing efficient productivity strategies or achieving economies of scale.
For the case given, the comparative advantage of Brazil and Chile is based on labor productivity only. Then:
- <em>The comparative advantage of Chile on sugar</em> =
= 0.4 - <em>The comparative advantage of Brazil on sugar </em>=
= 0.5
Thus, <em>Brazil has a comparative advantage over Chile on sugar.</em>
Answer:
C. In a process-costing system, each unit uses approximately the same amount of resources.
Explanation:
Option A is wrong because average production cost cannot be calculated for all units produced in a job-costing system. It is calculated from overhead allocation.
Option B is incorrect because overhead cannot be allocated to all units equally in the job costing method.
Option D is also false because, in a job costing system, individual jobs use different quantities of production resources. On the other hand, the process costing system uses the same amount of resources for each unit. Therefore, <em><u>option C</u></em> is correct.
