The term <u>price taker</u> refers to a firm operating in a perfectly competitive market that must take the prevailing market price for its product. Read below about a perfectly competitive market.
<h3>What is a perfectly competitive market?</h3>
In economics, a perfect market is also known as an atomistic market. A effect competition is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition.
Therefore, in such a market the price taker must take the prevailing market price its product.
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Answer:
-$5,873
Explanation:
For computation of maximum one month loss in dollars first we need to find out the net exposure and maximum one month loss in percentage which is shown below:-
Net exposure = Received amount - Paid amount
= €200,000 - €50,000
= €150,000
Maximum one - month loss in Percentage = Next month percentage - (Alpha × Euro percentage)
= 2% - (1.96 × 2.5%)
= -2.9%
Maximum one - month loss in Dollars = Net exposure × Current spot rate of the euro × Maximum one - month loss in Percentage
= €150,000 × $1.35 × (-0.029)
= -$5,873
Answer:
Month incurred Amount June July August
June 75,000 37500 18,750 18,750
July 95,000 47,500 23,750
August 95,000 47,500
37,500 66,250 90,000
The expected cash receipts are:
June = $37,500
July = $66,250
August = $90,000
Explanation:
The pattern of collection of sales is that 50% are collected in the months of sales while 25% each will be collected in the following month and following 2 months. For instance, 50% of June sales are collected in June, 25% are realized in July and 25% are collected in August. 50% of July sales are realized in July and 25% are collected in August.
A rise in the domestic real interest rate would cause a fall in net exports and a RISE in the exchange rate.
In general, businesses and consumers spend less when interest rates are high. This is because borrowing money costs more when interest rates are high. As a result, companies frequently turn to the stock market to raise money, which can cause stock values to decline.
An increase in interest rates causes the local currency to appreciate. In comparison to domestic goods and services, import prices decline. Exports see a decline in profitability and competition. Exports decline while imports rise, reducing the net export portion of total demand and spending.
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Problem:
Buy extended warranty for $950 laptop or not?
Alternative:
1) Buy extended warranty
2) Not buy extended warranty
Criteria:
Practical and cost saving in the long-run
Evaluate Alternatives:
1) <span>Buy extended warranty </span>
con:<span> pay additional $99. </span>
pro: <span>5 year warranty coverage. </span>
pro: repairs may be done at a local store
2) Not buy extended warranty
pro&con: laptop comes with one-year limited warrant
pro: no additional payment
con: repairs will be done by manufacturer
<span> con: repair costs range from $50 to $450
</span>
Decision:
BUY EXTENDED WARRANTY
