Answer:
The question is incomplete. However, kindly find below the complete version of the question:
Question
Jack and Diane own Enviromax, a monopolistically competitive firm that recycles paper products. (1.)If Enviromax wants to maximize profit, what price would they charge? (2).What is their profit per unit if they are operating at the profit maximizing output?
Answer / Explanation
(1) First before we continue to answer this question, let us define what a monopoly is: This is a kind of market situation where the sole production or manufacturing of a product have been given to a single entity.
The graph attached below will give us a proper understanding and illustration of the answer.
Where: MR in the graph is defined as the additional revenue obtained when producers produce 1 more unit of good and the AR refers to the total revenue divided by the amount of output produced which is essentially the price of one unit of good.
MC refers to the additional cost incurred by producers when they produce 1 more unit of good and is upwards sloping due to increasing opportunity costs of production.
Noting that since the firm is a monopolistic type, the MR curve is lower than the AR curve because if the firm wants to sell an additional unit of output it will have to lower the successive price. This is unlike the case of a firm operating in a PC where it takes the price as given and hence has no ability to set prices. it should also be noted that profit maximizing for all firms (whether PC or non-PC) occurs at MC=MR. This is because if MC>MR this means the additional cost of producing this unit of good > additional revenue obtained from selling this unit of good and is hence not profit maximizing. If MC<MR, this implies that the firm should not stop at producing this unit of good because it will be forgoing the additional net revenue (profit) should it do so. Hence all firms will produce at the point where MC=MR.
(2) Now referring back to the graph, the profit-maximising point where MC intersects MR hence occurs at output Q. The firm will hence produce Q and hence price at P according to the AR (DD) curve.
In the graph below, since AR > AC at the profit maximizing level, this implies that per unit revenue >
per unit costs and the firm makes a supernormal profit (defined as what excess profit above what is needed to keep firms in production which is normal profit) of the shaded area. If the firm was operating in a perfectly competitive market however, then the profit maximizing point would occur at AR =MC (since AR=MR in a PC market) and the firm would be producing at Qpc and Ppc
Answer: A. there has been a major increase in the amount of transfer payments the government makes through programs such as Social Security and unemployment insurance.
Explanation:
Since the 1950s, the US government budget for Transfer Payments to Social Security Programs and Unemployment benefits has increased tremendously.
The main transfer payments are Disability and Pension/ Retirement payments and they have been on the rise since the 50s.
These Transfer Payments are both a show of Humanitarianism as well as a form of Economic Investment as they help stimulate the Economy during times or Economic Distress by pouring money into it.
A typical example would be the $1,200 that Congress voted to provide direct cash payments of which totaled around $250 billion in March this year to help Americans who were hit hard by the lockdowns that have crippled much of the American economy.
Answer:
C) Net present value
Explanation:
In this method, the initial investment is subtracted from the discounted present value cash inflows. If the amount comes in positive than the project is beneficial for the company otherwise not.
And, the internal rate of return is that return in which the Net present value come zero.
The average rate of return shows a ratio between the average net profit and the average investment.
In mathematically,
Net present value = Present value of all yearly cash inflows after applying discount factor - initial investment
Answer:
$1,500
Explanation:
Investment interest expenses = Interest Income + Non qualifying dividends
Investment interest expenses = $500 + $1,000
Investment interest expenses = $1,500
$1,500 < $2,500 (Investment interest expenses)
The long term capital gains are not considered in investment income because this income is taxed at a preferential rate. Hence, the Investment interest expenses deduction for the year is $1,500.