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SVETLANKA909090 [29]
3 years ago
7

The following is a free response question released by the College Board from a previous AP exam to be used as practice for futur

e exams. You can complete the assignment in this document, using the drawing tools in Word (or any photo editing program) or print this document, and complete the activity by hand, submitting a scan or photo of your work. When you are done, submit the assignment for grading by your instructor. This question will be graded out of 7 points.
1. Assume that two firms are operating with identical cost schedules, but one firm is in a perfectly competitive industry and the other is in a monopolistically competitive industry.

(a) Using two correctly labeled graphs, show the long-run equilibrium price and output levels for each of these two firms.

(b) Compare the long-run equilibrium price and output levels for these two firms.

(c) What level of economic profit will each firm earn in the long run? Why do these results occur?

(d) For each of the two firms at the equilibrium quantity, indicate whether the firm’s demand curve is perfectly elastic, inelastic, unit elastic, inelastic, or perfectly inelastic. How can you tell?

Business
1 answer:
astraxan [27]3 years ago
5 0

<u>Solution and Explanation:</u>

(a). Firm in perfect competition produces at minimum efficient scale, MEC where average cost AC is minimum. The price is determined by the market supply and demand.

(b) Note that q1 is at the minimum of AC while Q* is to the left of q1. Similarly, P1 is equal to MC while P* is higher than MC. This shows that firms in perfect competition produce more and charge less than the firms in monopolistically competitive market.

(c) All firms in monopolistically competitive market as well as perfectly competitive market earn zero economic profit in the long run. This is because there is a free entry and exit

(d) Demand is steeper for firms in monopolistically competitive market so that demand is elastic. Demand is horizontal for any quantity which means it is perfectly elastic for a firm in competitive market.  

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What journal entry is made in a job-order costing system when $8,000 of materials are requisitioned for general factory use inst
Jlenok [28]

Answer:

(d) Manufacturing Overhead $8,000 Raw Materials $8,000

Explanation:

This will be an spending associate with the actual overhead.

These materials are indirect, so it should go in the factory overhead account.

They are not associate with any job in particular, so it cannot be capitalize through work in process.

8 0
3 years ago
On June 30, 2011, Cole Inc., exchanged 3,000 shares of Stone Corp. $30 par value common stock for a patent owned by Gore Co. The
11Alexandr11 [23.1K]

Answer:

$135000

Explanation:

Cole should record the patent at $135000. The intangible asset is recorded at the price at which it was purchased. Net carrying value of $160000 in the books of seller is not useful.

At the time of purchase of intangible asset, the fair value of stone stock exchanged was $45.

So the patent cost is =

3000 shares × $45 per share = $135000.

Cole should record the patent at this value.

8 0
3 years ago
"Hilary is working for a consulting firm making $60,000 per year but considers starting her own consulting company. Hilary has d
kompoz [17]

Answer:

1. Total implicit cost per year = $66,000

2. Total cost per year = $337,000

Explanation:

Given:

Salary = $60,000

Investment = $100,000

Rent = $75,000

Wages = $190,000

Materials and utilities = $6,000

Rate of return = 6%

Computation:

1. Total implicit cost per year:

Total implicit cost per year = Salary give up + Return on investment

Total implicit cost per year = $60,000 + ($100,000 x 6%)

Total implicit cost per year = $60,000 + $6,000

Total implicit cost per year = $66,000

2. Total cost per year:

Total cost per year = Total implicit cost per year + Rent + Wages + Materials and utilities

Total cost per year = $66,000 + $75,000 + $190,000 + $6,000

Total cost per year = $337,000

6 0
3 years ago
Andrew wants to play baseball with his friends. Before Andrew can play, his parents tell him that he has to clean his room, whic
Dafna1 [17]

Answer: b) The Premack Principle

Explanation:

Premack principle is the reinforcement method in which high probable behavior, attitude or activity is used to reinforce less expected behavior or act.This intends to make a person involved in less expected activities through more likely reinforcer act.

According to the question,Andrew's parent s are using premack principle by asking him to clean his room which is less -expected activity through high expect activity of playing.

Other options are incorrect because escaping attitude,punishment or positive reinforcement are not the reinforcement process to reinforce low probable behavior through  high probable behavior.Thus, the correct option is option(b).

7 0
2 years ago
What unknown factors might make it hard to predict the future size of a particular country's human population?
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There are a lot of factors that might affect to the prediction of the future sizze of a particular country's human population and makes it even harder because of the unknown factors. some may rely to the population of the country from the past years or even the past generations. future generations can make a difference in every way possible.
4 0
3 years ago
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