Answer:
$9,555
Explanation:
As for the trend provided, the year 3 Sales will also be $40,000
Cost of goods sold will be $25,000
gross margin = $15,000
Operating expenses are decreasing with time by 
Thus, it will decrease with the same trend = $7,000 - 22.22% = $5,445
Rounded off
Therefore, net income = $15,000 - $5,445 = $9,555
Note: Gain on sale of land is one time event and not permanent, thus it will not be considered as part of trend.
Answer:
The total surplus from Andrew's sale to Nick is $35.
Explanation:
The total surplus is the sum of producer surplus and consumer surplus.
The consumer surplus is the difference between the maximum price a consumer is willing to pay for a product and the price he/she actually has to pay.
While producer surplus is the difference between the minimum price a producer is willing to accept for a product and the price he/she actually gets.
Consumer surplus for Nick
= $80 - $60
= $20
Producer surplus for Andrew
= $60 - $45
= $15
Total surplus from generated from Andrew's sale to Nick
= $20 + $15
= $35
Answer: 1. A.Both firms will choose the low price.
2. B. Both firms would choose the high price.
Explanation:
1. If the firms cannot cooperate with each other and must choose simultaneously, both firms will choose the low price.
This is because at the low price both of them are at the highest profit they can make when they are not cooperating. For instance, if Firm B chooses Low Price and Firm A chooses High Price, Firm A will make $3 million while Firm be will make $8 million.
If Firm B decides to have a high price then firm A will take the low price and make $8 million in profit while Firm B makes $4 million. If they are not working together, they will both have to take the low price to make the most profit.
2. If the firms could cooperate with each other, both firms would choose the high price.
The is because they will be making more than competing and getting a lower profit. Should they cooperate they will each get $7 million in profit because they will pick the option they can both make the highest profit at. The is better than competing and making only $5 and $6 million respectively.
If you need any clarification do comment. Cheers.
Answer:
March 1
Account Debit Credit
Cash $323,000
Common Stock $153,000
Paid-In Capital in Excess
of Par Value $170,000
April 1
Account Debit Credit
Cash $87,000
Common Stock-no par value $87,000
April 6
Account Debit Credit
Inventory $56,000
Common Stock $56,000
Machinery $170,000
Paid-In Capital in Excess of
Common Stock $170,000
Note Payable $92,000
Cash $92,000
Answer: Monopolistic competition
Explanation:
Monopolistic competition is described as a competition between firms where they offer similar services but not the same or exact services. This competition is seen in industries where differentiation is possible, example of such industries are restaurant, hairdressers, clothing, TV programs.
