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PilotLPTM [1.2K]
3 years ago
5

When Simple Semiconductors was operating at the minimum efficient scale of 10,000–12,000 units per month, the firm's cost per un

it was $45. However, when the output level was increased beyond 12,000 units, the cost per unit increased to $47. This increase was attributed to the wear-and-tear of the machinery, and complexities of managing and coordinating. What is this phenomenon known as?
Business
2 answers:
USPshnik [31]3 years ago
6 0

Answer:

Capacity Limits (Fixed Overhead)

Explanation:

Cost are generally divided into Variable and Fixed Cost. Every operation, machine or factory are limited to a particular capacity. As is the case in question, the machine capacity of Simple Semiconductors 12,000 unit. Production above the capacity of the machine would result to a strain in the machine hence the increased cost as a result of regular maintenance.

The cost of materials and labor (variable cost) have not increased. To produce above 12,000 units, a new machine should be purchased. This would effectively increase the capacity while forcing down the unit cost of the product if they are producing at their optimum capacity.

Sauron [17]3 years ago
4 0

Answer:

Diseconomies of scale.

Explanation:

In microeconomics, diseconomies of scale are the cost disadvantages that economic actors accrue due to an increase in organizational size or on output, resulting in production of goods and services at increased per-unit costs.

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AysviL [449]

I would say the answer is True

7 0
3 years ago
In the event of death, this insurance covers the entrepreneur's business and helps family face the financial challenges.
allsm [11]

Answer:

a

Life

Explanation:

Life insurance is a contract where the insurance company undertakes to pay the amount stated in the policy document upon the insured's death. The insured, in turn, pays periodic insurance premiums to keep the contract in force.

Life insurance renders financial protection to the family and the insured upon their death. For an entrepreneur, the insurance company will compensate their family for the loss of income occasioned by their death.

8 0
3 years ago
Which of the following would be a producer? someone owning a book store someone shopping in a grocery store someone putting gas
Luba_88 [7]

Example of a producer can be regarded as someone owning a book store .

<h3>Who is a producer?</h3>

A producer can be regarded as a manufacturer of a particular product or service.

Therefore, in the case above, a producer serves as the one that own the shop, however he can decide to distribute his products to retailer.

Learn more about producer at;

brainly.com/question/12441980

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4 0
2 years ago
Assume that you purchased a $1,000 perpetual bond (coupon payment is $50) and the interest rate on that bond declined from 5 per
Svetlanka [38]

Answer:

D) all of the above

Explanation:

First find the present value for each alternative  using PV of perpetual cashflow formula;

PV = CF / rate

CF = 50

If rate= 5%;

PV = 50/0.05 = $1,000

If rate = 2%;

PV = 50/0.02 = $2,500

With these two calculations, we see that;

-the bond price increased by $1,500

-you could sell this bond at a capital gain, meaning you can sell it a higher price that what you bought it for.

-at an interest rate of 2%, the speculative demand for money would increase

Hence , all these choices are correct!

5 0
3 years ago
company's perpetual preferred stock currently sells for $92.50 per share, and it pays an $8.00 annual dividend. If the company w
andrew11 [14]

Answer:

The firm's cost of preferred stock is  9.10%

Explanation:

The cost of preferred stock with the flotation of 5% would be the dividend payable by the preferred stock divided by the adjusted current market price(adjusted for flotation cost)

The dividend per year is $8

The adjusted price of the stock=$92.50*(1-f)

where f is the flotation cost in percentage terms i.e 5%

adjusted price of the stock is =$92.50*(1-5%)=$ 87.88  

Cost of preferred stock=$8/$87.88*100  = 9.10%

4 0
3 years ago
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