The per-unit economic profit at the profit-maximizing output is $112 if the product price is $283.
<h3>How do we calculate profit-maximizing price?</h3>
The rule for calculating a profit-maximizing perfectly competitive firm is to produce the level of output where Price equals the Marginal Revenues= Marginal cost.
Hence, the economic profit is calculated by Total Revenue - (Explicit Costs + Implicit Costs) because it entails the difference between the revenue received from the sale of an output and the costs of all inputs.
Therefore, the per-unit economic profit at the profit-maximizing output is $112 if the product price is $283.
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Answer:
The correct answer is True.
Explanation:
The concept of “Disruptive Innovation” is relatively new, it was introduced by Clayton Christensen in 1997 in the book “The innovators dilemma” and refers to how a product or service that originally was born as something residual or as a simple application without Many followers or users quickly become the leading product or service in the market.
Disruption therefore occurs when emerging companies use new technologies or new business models and outperform the market that were the leaders until then.
There comes a time when users do not perceive as a differential advantage the type of evolutionary innovation that has been applied to a product, because they no longer need all those new features that the manufacturer has added to increase the profit and then the manufacturer becomes vulnerable and the evolution of that particular product ceases to be decisive, from that moment the price of that product can become decisive or another product will arrive with a new disruptive technology that will compete with the previous product and with the established technology. The most normal is that new products or services are easier to use and cheaper than products that were already on the market before and thus quickly capture the interest of consumers.
Answer:
The correct answer is B. demand for good X will increase.
Explanation:
Two goods, X and Y, are said to be substitutes if they can be used to serve the same purpose. Thus, if good X is a substitute to good Y, then X can be used in place of Y and Y can be used in place of X.
For substitute goods, the cross-price elasticity of demand is positive. This means that if the price of one good rises, the demand for the substitute good increases.
Answer:
c. $ 95,000 $ 0
Explanation:
<u>Calculation of cost of land acquired</u>
For the purpose of recording of land acquired in the books of accounts, the accounting values of consideration paid shall be considered as per the generally accepted accounting principles as well as as per International accounting standard (IAS) - 16 'Property, plant and equipment'. Hence the land shall be recorded as per the following amounts:
Consideration paid in cash (A) = $ 5,000
Consideration in kind (land) (B) = $ 90,000 (Refer Note 1)
Total cost of new land (A+B) = $ 95,000
<em>Note 1</em>
Fair value is irrelevant for the purpose of capitalization of asset (IAS-16)
<u>Calculation of Gain/loss on disposal of land</u>
No gain/loss needs to be recorded as the new asset shall be recorded in terms of the book value of old asset (i.e. net impact is already taken into account during the exchange transaction)
