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Gnom [1K]
3 years ago
10

You have been hired by the No Hassle Collection Agency to provide economic advice. The owner of the agency tells you that No Has

sle's only variable input is the number of collection agents. The hourly wage for collection agents is $40.00. The marginal revenue product curve for collection agents reaches its maximum at five workers with a marginal revenue product of $34.00. What advice would you give this firm?
A. Shut down immediately, as the firm is not able to cover all of its variable costs.
B. Produce as much as possible so as to maximize the difference between the wage paid to collection agents and their marginal revenue product.
C. Hire five collection agents so as to minimize the amount of money the firm will lose.
D. Increase the wage rate paid to collection agents so that their marginal revenue product will increase.
Business
1 answer:
NeX [460]3 years ago
5 0

Answer:

A. Shut down immediately, as the firm is not able to cover all of its variable costs.

Explanation:

Unfortunately, the company contribution is negative. Even at maximum revenue it cannot cover the variable cost needed to produce this revenue. Therefore, is not possible to make a gross profit to afford the rest of the cost. Currently, the company has their fixed cost and the loss from operations.

If it shut down, it will stop the loss from operations and only leave the fixed cost.

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Answer: $1,212,000 or $1.212 million

Explanation:

To calculate the dollars’ worth of the index the manager should sell in the futures market to minimize the volatility of her position, we can use the following formula,

Dollar worth of index to sell = Value of the Portfolio * Portfolio Beta

Dollar worth of index to sell = 1,200,000 * 1.01

Dollar worth of index to sell = $1,212,000

The manager should sell $1,212,000 worth of the index in the futures market to minimize the volatility of her position.

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Wonder Corporation declared a common stock dividend to all shareholders of record on September 30, 20X3. Shareholders will recei
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Answer:

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