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4 years ago

For each scenario, decide whether it creates a producer or a consumer surplus. Then, calculate the ensuing surplus.

Business

1 answer:

Gnom [1K]4 years ago

5 0

Answer:

Alice's consumer surplus = $5

Jeff's consumer surplus = $16

Nicole's producer surplus = $1

Explanation:

Consumer surplus is the difference between the willingness to pay of a consumer and the price of a good.

Consumer surplus = willingness to pay - price of the good

Producer surplus is the difference between the price of a good and the least price the producer is willing to accept

Producer surplus = price of the good - least price the producer is willing to accept

Alice's consumer surplus = $30 - ($35 - $10) = $5

Jeff's consumer surplus = $20 - [$16 - (0.75 x $16)] = $16

Nicole's producer surplus = $501 - $500 = $1

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Marty and Mary have jobs and contribute to the household expenses according to their income. Marty contributes 75% of the expen

Len [333]

Answer:

Answer explained

Explanation:

Firstly, we write down data & figures provided in question.

Annual household expense - $ 30,000

Marty contribution to household expenses is 75% amounting $ 22,500

Mary contribution to household expenses is 25% amounting $ 7,500

Rate of Interest on Investment - 6% per annum

Now question is how much life insurance should they purchase for marty so they can maintain current living standard and discharge other obligation in case of Marty's death.

Therefore, Insurance amount = Amount require to invest at 6% interest to provide annual interest income equals to marty's annual contribution to household expense + $ 75,000 (3x25,000) for college + $ 20,000 for nurse training + $ 55,000 for mortgage

Amount require to invest at 6% interest to provide annual interest income equals to marty's annual contribution to household expense = $ 22,500/0.06 = $ 375,000

Insurance Amount = 375,000 + 75,000 + 20,000 + 55,000 = $ 525,000

4 0

3 years ago

Burton Corp. is growing quickly. Dividends are expected to grow at a rate of 30 percent for the next three years, with the growt

GaryK [48]

Answer:

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Explanation:

3 0

3 years ago

Tim purchased a bounce house one year ago for $6,500. During the year it generated $4,000 in cash flow. If Time sells the bounce

Mkey [24]

Answer:

Tim's rate of return under these conditions would be <u>55.38%</u>.

Explanation:

Rate of return refers to the income realized or to be realized from an investment expressed as a proportion of the cost of that investment.

For Time, his rate of return can be calculated using the rate of return formula as follows:

Rate of return = Net return / Purchase price .................... (1)

Where;

Rate of return = ?

Net return = Total realizable amount - Purchase price .......... (2)

Purchase price = $6,500

Total realizable amount = Cash flow generated + Amount to realize if sold = $4,000 + $6,100 = $10,100

Substitute the relevant values into equation (2), we have:

Net return = $10,100 - $6,500 = $3,600

Substitute the relevant values into equation (1), we have:

Rate of return = $3,600 / $6,100 = 0.5538, or 55.38%

Therefore, his rate of return under these conditions would be <u>55.38%</u>.

6 0

4 years ago

Read 2 more answers

Compare and contrast the potential for a perfectly competitive firm and a monopolistically competitive firm to earn positive eco

Kazeer [188]

Explanation:

There are no deficits or surpluses in terms of output, no obstacles to the entry or exit of businesses on the market, and the number of customers is so high that it is only the economic demand that decides the value of the products in the market. Thus, the reality is that the market is completely open. All producers earn normal profit and both manufacturers and consumers accept the commodity price.

In comparison, a monopoly market competition can be defined as a business environment where one entity or group of companies dominates the supply market and thus controls output factors. In this case, the monopolist decides the price of the goods on the market, as the competition is always strong. Free entry or departure from companies is not allowed in a monopolistic competitive market.

The short-term and long-term production or profitability are the same in the case of a fully competitive market. Since the production factors are often under control and fully meet the demand and supply of the market. In the shorter term and that in the long run, a perfect competition business will see stable and strong economic growth. In the case of a business or corporation which is fully competitive, there is no distinction between the competitors ' profit margins and all companies have the same rate of profit.

3 0

3 years ago

The Fortise Corporation manufactures two types of vacuum cleaners, the Victor for commercial building use and the House-Mate for

jolli1 [7]

Answer:

The Fortise Corporation

The total sales-mix variance closest to $1,055,000 in terms of the contribution margin.

Explanation:

a) Data and Calculations:

Static Budget Victor House-Mate Total

Total Number sold 20,000 80,000 100,000

Contribution margin $4,600,000 $15,200,000 $19,800,000

Actual Results Victor House-Mate Total

Number sold 21,500 64,500 86,000

Contribution margin $6,665,000 $14,190,000 $20,855,000

Variance

Number sold 1,500 F 15,500 U 14,000 U

Contribution margin $2,065,000 F $1,010,000 U $1,055,000 F

4 0

3 years ago