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Kay [80]
3 years ago
8

For each of the following statements, indicate whether it is true, false, or uncertain and EXPLAIN WHY. a. In the long-run the t

ypical monopolistically competitive firm earns no economic profit and that indicates that the firm is economically (productively) efficient. b. Monopolists have complete pricing freedom as they seek to maximize profits. c. In the short-run, if price drops below the average total cost, the perfectly competitive firm must shut down immediately.
Business
2 answers:
Colt1911 [192]3 years ago
7 0

Answer:

a.

FALSE

<em>The argument above is in part inaccurate. In the long run, the monopoly dominant firms gain no economic profit at the profit generating production as their LRAC= LRAR at. </em>

The firm is not effective economically (productively) though.

A monopolistically dominant firm is not successful effective because it does not achieve the average cost curve at the minimum level. The difference between supply and supply of the equilibrium at the minimum average cost is called overcapacity.

b.

FALSE

The monopolist has the power to make the price to maximize the profit. The monopolist, however, always has to respect demand rule of law. Its AR-curve is a sloping downward curve.

<em>It indicates that if the monopolist decides to increase production, he will have to lower the price. It shows that to increase income, the monopolist can set its price but can not set any price.</em>

c.

FALSE

The shut down point for reasonably competitive firms is Price= AVC.

When the price falls below the average cost of the product, otherwise the business must shut off.

<em>Otherwise, the business must continue to manufacture until the price falls below the average cost of the product. It will still deliver, even if the average income or price is below the average output.</em>

Shalnov [3]3 years ago
7 0

Answer:

The answer is a) True, (b) False, (c) True

Explanation:

A) In the long run, a monopolistically competitive firm will make zero economic profit. This is as a result of the amount of influence the firm has over the  market because of brand loyalty, it can raise its prices without losing all of its customers.

(B) In order to maximize profits, the monopoly in equilibrium would be producing at an output level where marginal revenue be equal to marginal cost (MR = MC).

(C) If the price falls below average variable cost, then the firm is better off shutting production in the short run. By producing any output, it does not generate enough revenue to cover variable cost let alone any fixed cost.

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(C) Direct marketing.

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  • This can be done over the phone, during a prearranged in-person meeting, or by web conferencing.
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  • Direct marketing datamining techniques that use predictive market segmentation are part of microtargeting, which is frequently used by political parties and election campaigns.
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  • The act of presenting an offer directly to a target client and providing them with a way to respond immediately is known as direct marketing.
  • It is sometimes referred to as direct response marketing among practitioners.
  • Advertising, in contrast, is a form of mass messaging.
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3 0
1 year ago
Hector is a married, self-employed taxpayer, and this year he paid $3,000 for his health insurance premiums (not through an exch
Korvikt [17]

Answer:

The answer to this question is option  B. Hector's spouse participates in an employer-sponsored plan but Hector is not eligible to participate in this plan.

Explanation:

Hector can deduct the cost of the premium for AGI if Hector's spouse participates in an employer-sponsored plan but Hector is not eligible to participate in this plan.

7 0
3 years ago
At Ruth Company, events and transactions during 2020 included the following. The tax rate for all items is 20%. (1) Depreciation
Ann [662]

Answer:

D. ($100,000)

Explanation:

Calculation for what The effect of these events and transactions on 2020 income from continuing operations net of tax would be

Continuing operations net of tax=(20%*$125,000)-$125,000

Continuing operations net of tax=$25,000-$125,000

Continuing operations net of tax=($100,000)

Therefore The effect of these events and transactions on 2020 income from continuing operations net of tax would be ($100,000)

3 0
3 years ago
Olivia asks several real estate agents to help her sell her house. A buyer is found. At the closing, no agent receives a commiss
STALIN [3.7K]

Answer: Open Listing

Explanation: The seller sold the real estate herself therefore she did not have to pay a commission.

8 0
2 years ago
Bramble Corp. recorded operating data for its auto accessories division for the year. Sales $790000 Contribution margin 260000 T
Andrei [34K]

Answer:

80%

Explanation:

For computing the return on investment first we have to need the following calculations

New contribution margin = Old contribution margin + increase  in contribution margin

= $260,000 + $30,000

= $290,000

And,

Net Income = Contribution margin - Total direct fixed costs

= $290,000 - $90,000

= $200,000

ROI = Net income ÷  average operating assets

= $200,000 ÷ $250,000

= 80%

3 0
3 years ago
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