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Marysya12 [62]
3 years ago
15

Last month you assumed the position of manager for a large car dealership. The distinguishing feature of this dealership is its

"no hassle" pricing strategy; prices (usually well below the sticker price) are posted on the windows, and your sales staff has a reputation for not negotiating with customers. Last year, your company spent $2 million on advertisements to inform customers about its "no hassle" policy, and had overall sales revenue of $40 million. A recent study from an agency on Madison Avenue indicates that, for each 3 percent increase in TV advertising expenditures, a car dealer can expect to sell 12 percent more cars—but that it would take a 4 percent decrease in price to generate the same 12 percent increase in units sold. Assuming the information from Madison Avenue is correct, should you increase or decrease your firm’s level of advertising? Explain.

Business
1 answer:
ELEN [110]3 years ago
8 0

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

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Superior Corporation reported taxable income of $1,000,000 in 20X3. Superior paid a dividend of $100,000 to its sole shareholder
Komok [63]

Answer:

$225,000

Explanation:

Federal corporate income tax (21% flat rate)

$1,000,000 x 21% = $210,000

Federal dividend tax (15%).

$100,000 x 15% = $15,000

Dividens are neither expenses nor deductible, so they do not reduce the amount of corporate taxable income. Therefore we must add up the two quantities.

$210,000 + $15,000 = $225,000

7 0
3 years ago
A profit-maximizing firm will not employ an additional unit of a resource if the marginal product of that unit is greater than t
Lubov Fominskaja [6]

Answer:

The Answer is A) True                                    

Explanation:

The marginal cost of production and marginal revenue are economic measures used to determine the amount of output and the price per unit of a product that will maximize profits. A rational company always seeks to optimize its profit, and the relationship between marginal revenue and the marginal cost of production helps to find the point at which this occurs. The point at which marginal revenue equals marginal cost maximizes a company's profit.

Cheers!

4 0
3 years ago
One hypothesis for declining productivity growth rates since the Great Recession is that technological progress has been so rapi
Mice21 [21]

Answer:

False

Explanation:

history has documented that the Great Recession occurs between December 2007 to June of 2009. The recession lead to losses in countries such as the output went down and unemployment went up. The causes of the Great Recession are Rising Inequality, Loosening of bank lending rules and rise of mortgage securitization.

Technological advance is hand in hand with capital formation. Productivity growth rates is of utmost importance due to the fact that productivity growth rates have a big impact on future economic growth and development of the​ new economy was due to advances in information technology.

3 0
3 years ago
Stocks are generally considered a higher risk because:
user100 [1]
I would say A) their values vary overtime it’s the most reasonable answer

Hope this helps! :)
3 0
3 years ago
A monopoly, unlike a perfectly competitive firm, has some market power. Thus, it can raise its price, within limits, without qua
yanalaym [24]

Answer:

The correct answer is: legal barriers.

Explanation:

A monopoly is a market structure where there is only a single firm, there is a restriction on the entry of firms. This gives firms a certain degree of market power.  

The monopolies are able to retain their market power through restrictions on the entry of other potential firms. These restrictions are of different types such as exclusive ownership of a resource, legal barriers, increasing returns to scale.  

In this particular scenario of patents, the barrier to entry is a legal barrier. The other potential firms are legally restricted to enter the market as they do not hold a patent.

7 0
3 years ago
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