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Amanda [17]
3 years ago
5

Sources of monopoly power A monopolist, unlike a competitive firm, has some market power. It can raise its price, within limits,

without the quantity demanded falling to zero The main way it retains its market power is through barriers to entry-that is, other companies cannot enter the market to create competition in that particular industry Complete the following table by indicating which barrier to entry appropriately explains why a monopoly exists in each scenario.
Exclusive
Ownership Government-
of a Key Created Economies
Resource Monopolies of Sale
Patents are granted to inventors of a product
or process for a certain number of years. The
reason for this is to encourage innovation in the
economy. Without the existence of patents, it is
argued, research and development for improved
electronics is unlikely to take place, since there’s
nothing preventing another firm from stealing the
idea, copying the product, and producing it without
incurring the development costs.
Throughout much of the 20th century, many people
viewed South Africa’s De Beers Group as a monopoly
because it controlled a large percentage of diamond
production and sales.
In the electricity industry, low average total costs are
obtained only through large-scale production. In other
words, the initial cost of setting up all the necessary
wiring makes it risky and, most likely, unprofitable for
competitors to enter the market.
Business
1 answer:
Rashid [163]3 years ago
8 0

Answer:

1. Patents are granted to inventors of a product or process for a certain number of years. The reason for this is to encourage innovation in the economy. Without the existence of patents, it is argued, research and development for improved electronics is unlikely to take place, since there’s nothing preventing another firm from stealing the idea, copying the product, and producing it without incurring the development costs.

<u>Government Created Monopoly</u>.

Patents protect the intellectual property of a person or entity and prevent others from taking it and using it without rewarding the people who came up with it. The owners of the parents are able to dictate the selling of the resource and as such have a monopoly over it. Patents are granted by the government which makes this a Government created Monopoly.

2. Throughout much of the 20th century, many people viewed South Africa’s De Beers Group as a monopoly because it controlled a large percentage of diamond production and sales.

<u>Ownership of Key Economic Resource</u>.

As early as 1902, De Beers controlled 90% of the world's diamond production and under the leadership of J P Morgan, consolidated control over the diamond industry. They controlled many mines and also bought diamonds from other producers allowing them to control the diamond trade. Even though their control has waned of late, they still control around 35% of the world's diamond production which is a very significant percentage.

3. In the electricity industry, low average total costs are obtained only through large-scale production. In other words, the initial cost of setting up all the necessary wiring makes it risky and, most likely, unprofitable for competitors to enter the market.

<u>Economies of Scale </u>

To survive in the Electricity industry the company would need to have an extensive network to permit them to benefit from Economies of Scale. This can be very difficult to set up so companies stay away from the industry thereby creating a monopoly for those already in it.

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In 2019, Carlos filed his 2018 state income tax return and paid taxes of $800. Also in 2019, Carlos's employer withheld state in
irga5000 [103]

Answer:

He can deduct on his 2019 federal income tax return for state income tax $1,550

Explanation:

According to the given data, we can conclude that Carlos cannot deduct the addition of $600 of state income until next year.

Therefore, in order to calculate how much state income tax can Carlos deduct on his 2019 federal income tax return for state income tax we would need to make the following calculation

income tax to deduct on 2019 federal income tax return= Taxes paid+ withheld state income tax from salary

income tax to deduct on 2019 federal income tax return= $800 + $750 income tax to deduct on 2019 federal income tax return=$1,550.

6 0
3 years ago
What is Jensen's alpha of a portfolio comprised of 45 percent portfolio A and 55 percent of portfolio B? Portfolio Average Retur
inn [45]

Answer:

The Jensen's alpha of a portfolio comprised of 45 percent portfolio A and 55 percent of portfolio B = 2.04 %

Explanation:

<em>Solution</em>

Given that:

Now,

The Jensen’s alpha of a Portfolio is computed by applying  the formula  below:

Jensen's alpha = Portfolio Return − [Risk Free Rate of Return + ( Portfolio Beta * (Market Rate of Return − Risk Free Rate of Return ) ) ]

For the information given in the question we have the following,

The Risk free rate of return = 3. 1%

In order to find the Jensen’s alpha we have to first get the following from the information given in the question :

1. Portfolio Return

2. Portfolio Beta

3.Market Rate of Return

Thus,

(A)Calculation of Portfolio Return :

The formula for calculation of Portfolio Return is  given as:

E(RP) = ( RA * WA )+ ( RB * WB )

Where

E(RP) = Portfolio Return

RA = Average Return of Portfolio A ; WA = Weight of Investment in Portfolio A

RB = Average Return of Portfolio B ;  WB = Weight of Investment in Portfolio B

For the information given in the question we have the following:

RA = 18.9 %, WA = 45 % = 0.45, RB = 13.2 %,  WB = 55 % = 0.55

By applying the values in the formula we have

= ( 18.9 % * 0.45 ) + ( 13.2 % * 0.55 )

= 8.5050 % + 7.2600 % = 15.7650 %

(B). Calculation of Portfolio Beta:

Now,

The formula for calculating the Portfolio Beta is

ΒP = [ ( WA * βA ) + ( WB * βB ) ]

Where,

βP = Portfolio Beta

WA = Weight of Investment in Portfolio A = 45 % = 0.45 ; βA = Beta of Portfolio A = 1.92

WB = Weight of Investment in Portfolio B = 55 % = 0.55 ; βB = Beta of Portfolio B = 1.27

By Applying the above vales in the formula we have

= ( 0.45 * 1.92 )   + ( 0.55 * 1.27 )

= 0.8640 + 0.6985

= 1.5625

(C). Calculation of Market rate of return :

Now,

The Market Risk Premium = Market rate of return - Risk free rate

From the Information given in the Question we have

The Market Risk Premium = 6.8 %

Risk free rate = 3. 1 %

Market rate of return = To find

Then

By applying the above information in the Market Risk Premium formula we have

6.8 % = Market rate of Return - 3.1 %

Thus Market rate of return = 6.8 % + 3.1 % = 9.9 %

So,

From the following  information, we gave

Risk free rate of return = 3.1% ; Portfolio Return = 15.7650 %

The Portfolio Beta = 1.5625 ; Market Rate of Return = 9.9 %

Now

Applying the above values in the Jensen’s Alpha formula we have

The Jensen's alpha = Portfolio Return − [Risk Free Rate of Return + ( Portfolio Beta * (Market Rate of Return − Risk Free Rate of Return )) ]

= 15.7650 % - [ 3.1 % + ( 1.5625 * ( 9.9 % - 3.1 % ) ) ]

= 15.7650 % - [ 3.1 % + ( 1.5625 * 6.8 % ) ]                  

= 15.7650 % - [ 3.1 % + 10.6250 % ]

= 15.7650 % - 13.7250 %

= 2.0400 %

= 2.04 % ( when rounded off to two decimal places )

Therefore, the Jensen's alpha of a portfolio comprised of 45 percent portfolio A and 55 percent of portfolio B = 2.04 %

7 0
3 years ago
Swan Finance Company, an accrual method taxpayer, requires all of its customers to carry credit life insurance. If a customer di
posledela

Answer:

Recognize an income/loan repayment of $1,300, and cancel the debt of $200 from the earlier recognition of income

Explanation:

Swan would only recognize an income/loan repayment of $1,300 having already recognized an initial income of $200 of the $1,500 owed before the death of the customer.

Accounting entries would be as follows.

Debit Bank account: $1,500

Credit income/loan repayment account: :1,300

Credit receivables: $200.

The credit of $200 in receivables would be treated as shown above due to the income of $200 already recognised and which would have been treated as follows when it was recognized,

Dr: receivables $200

Cr. interest earned $200,

7 0
3 years ago
Everything else equal, if the United States runs a large foreign trade deficit, the financing of the deficit will: a. increase g
sladkih [1.3K]

Answer: decrease tax revenue

Explanation:

A trade deficit occurs when the import of a country's is more than the export of the country for a given period of time period. The main cause is when there's an imbalance between the savings of a country and the investment rates.

In this case, financing the deficit will lead to the reduction in the tax revenue. When part of the tax revenue gotten from economic agents are used in the finance of the deficit, there'll be a reduction in the tax revenue.

6 0
2 years ago
For an accountant, which of the following tasks is the most likely to be done
bija089 [108]

Answer:

Explanation:

Which of the following tasks are least likely to be part of the accountant's role in ... be done, which are technical, environmental, legal, operational, and sensible.

6 0
3 years ago
Read 2 more answers
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