Answer:
Central, Peripheral
Explanation:
The advert is intended to highlight the pros of the particular car. However, the ad agency recognizes that to convince prospective buyers they must explore different options to persuasion. The car's safety and gas mileage are the Central Route. The driving fun is the Peripheral
Answer:
C. subtracting the competitive level producer surplus from the producer surplus associated with less output
Explanation:
A deadweight loss refers to a cost to society created as a result of market inefficiency. Market inefficiency occurs when supply and demand are out of equilibrium. It is also known as excess burden.
Deadweight loss is also created due to taxes as they prevent people from purchasing things that they would otherwise as the final price of the product increases.
The deadweight loss associated with output less than the competitive level can be determined by subtracting the competitive level producer surplus from the producer surplus associated with less output
Answer:
47.37%
Explanation:
The capital budget is $625,000 out of which 40% is equity and the rest 60% is debt. The company forecasts the net income for the year to be $475,000. Grandin Inc. follows residual dividend policy and pays out all the residual income to its shareholders as dividend.
The portion of equity in the capital budget is $625,000 * 40% = $250,000
The net income potion which will be attributable to equity shareholders is
$250,000 / $475,000 = 47.37%
Answer:
B. It depends on the marginal cost of serving more clients and the marginal revenue he will earn from serving more clients.
Explanation:
As the barber is currently cutting hair for 50 clients per week and earns a profit. He is now considering expanding his operation in order to serve more clients. He should expand his business by considering the marginal cost of serving more clients and the marginal revenue he will earn from serving more clients. Marginal revenue and marginal cost has much importance here in order to make the decision. Marginal revenue is the profit which is obtained by selling one extra unit, here serving one more additional customer, whereas, the marginal cost is selling that one extra or additional unit/serving the customer. In this particular case, if the marginal revenues are greater than the marginal costs then he should definitely expand his operations, which means that move will bring more profits to his business.
