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Elodia [21]
3 years ago
14

Explain why market power leads to deadweight loss. Firms with market power create deadweight loss because they A. charge a price

that is greater than marginal cost to maximize profits. B. produce where marginal revenue is greater than marginal cost to maximize profits. C. produce more than a perfectly competitive industry would to maximize profits. D. charge a price that is less than marginal cost to maximize profits. E. charge a price that is equal to marginal cost to maximize economic surplus. The total deadweight loss from market power for the economy is ________ small large .
Business
1 answer:
Readme [11.4K]3 years ago
5 0

Answer:

A) Charge a price that is greater than marginal cost to maximize profits.

Explanation:

The more market power a company has, the more it will tend to act like a monopoly. For example, Microsoft is not considered a monopoly because it is the only software company in the world, but because its market power in the PC business is so large that it dominates the industry.

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Brewco sells coffee makers for $120 each. the firm currently has variable costs per unit of $65. if brewco is able to reduce its
zhannawk [14.2K]
Contribution margin is calculated via subtracting the variable cost per unit to the sales price per unit. In equation, we have

Contribution margin = Sales Price - Variable Cost

Contribution margin ratio is calculated via dividing the contribution margin with the sales price. In equation, we have

Contribution margin ratio = contribution margin/sales price

Substituting the given values,
Contribution margin ratio for 65$ variable cost = (120-65)/120 = 0.4583 
Contribution margin ratio for 58$ variable cost = (120-58)/120 = 0.5167

<em>ANSWERS: 0.4583 or 45.83% and 0.5167 or 51.67%</em>

8 0
3 years ago
Uber plans to sell shares of common stock to raise capital funds. They estimate that each share of common stock will sell for $1
blsea [12.9K]

Answer:

cost of capital of common stock = 13.38 %

Explanation:

given data

common stock sell = $145

fee charge= 5%

face value = $145 per share

dividend = 7%

growth rate = 8%

to find out

Uber cost of capital of common stock

solution

we get here cost of capital of  common stock that is express as

cost of capital of common stock = \frac{D1}{Po-f} + g    ....................1

here D1 is dividend at end year and Po is today price and f is flotation rate and g is growth rate

so we get here

cost of capital of common stock = \frac{113*0.05}{113-113*0.07} + 0.08    

cost of capital of common stock = 0.133763

cost of capital of common stock = 13.38 %

4 0
3 years ago
Actual total factory overhead incurred $ 28,875 Standard factory overhead: Variable overhead $ 2.10 per unit produced Fixed over
klasskru [66]

Answer:

Overhead volume variance= $1000 unfavorable

Explanation:

Giving the following information:

Actual total factory overhead incurred $ 28,875 Standard factory overhead: Variable overhead $ 2.10 per unit produced Fixed overhead ($11,200/11,200 predicted units to be produced) $ 1.00 per unit Predicted units to produce 11,200 units Actual units produced 10,200 units.

Overhead volume variance= fixed overhead rate*(Normal capacity - standard capacity)

Fixed overhead rate= $1 per unit

Standard capacity= 11,200 units

Normal capacity= 10,200

Overhead volume variance= 1*(10,200 - 11,200)= $1000 unfavorable

4 0
3 years ago
The set of whole number less than 5​
ivanzaharov [21]

Answer:

The set of whole number less than 5 is 0,1,2,3,4

5 0
3 years ago
The u.s. department of transportation estimates that 10% of americans carpool. does that imply that 10% of cars will have two or
daser333 [38]

Answer: I HAVE NO IDEA SORRYYYYYYYY

Explanation:

6 0
3 years ago
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