Assume that the market for corn is perfectly competitive. Currently, firms growing corn are generating losses. In the long run, we can expect "some firms to exit causing the market price of corn to rise.".
<h3>What is perfectly competitive market?</h3>
According to economic theory, perfect competition exists when all businesses sell the same goods, market share has no bearing on prices, businesses can enter or quit the market without any obstacles, consumers have perfect or complete information, and businesses are unable to set prices.
There are five characteristics that have to exist in order for a market to be considered perfectly competitive. The characteristics are -
- homogenous items,
- no entry or exit obstacles,
- price taker sellers,
- transparent products, and
- no seller has any control over market prices.
The three key components of perfect competition are as follows:
- There are a lot of buyers and sellers in the market.
- These buyers and sellers are in competition with one another.
- The good being offered or purchased is uniform.
- Companies are free to enter or leave the market.
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Answer:
The revenue recognition principle
Explanation:
The revenue recognition principle states that revenue should be recorded when services have been performed or products have been delivered to customers and not when cash is received for the service rendered
For example, if a supplier delivers 10,000 worth of goods to consumers in November and is paid for the goods in December. Revenue should be recognised in November and not December.
Answer:
D. -4/5
Explanation:
Given that
Wage rate = $20 per hour
Cost of capital = $25 per hour
Recall that,
Slope of isocost = -(w/r)
Where,
W = wage rate
r = rental cost of capital.
Thus,
Slope of isocost curve
= -(20/25)
= -0.8 or -4/5
Note that, the negative of the ratio is the price of the two inputs. Also isocost is a line showing the various combinations of inputs which cost the same amount.
Answer:
The statement is true
Explanation:
Marketing strategy is the strategy which is defined as all of the marketing objective as well as goals of the company combined into a one or a single comprehensive plan. It is the one which develop and create marketing mix.
It is designed in order to develop or promote the good and service so that the business could earn or make profit.
So, the statement is true as it is stating that the strategies involve selecting activities and define 1 or more target markets. Also maintain and develop the marketing mix.
Answer and Explanation:
The computation is shown below:
As we know that
1. Return on assets is
= Net income ÷ avg total assets
where,
Avg total assets is
= (opening total assets + closing total assets) ÷ 2
= ($6,806.4 + $6,899.2) ÷ 2
= $6,852.8
Now return on asset is
= $481.6 ÷ $6,852.8
= 7.0%
2. Assets turnover ratio = net sales ÷ avg total assets
= $17,371.2 ÷ $6,852.8
= 2.5 times
3. Profit margin = net income ÷net sales
= $481.6 ÷ $17,371.2
= 2.8%
