Price ceiling and price floor are two types of price
controls. Price ceiling is the allowable highest price for a particular food or
service while price floor is the allowable lowest price. The government
determines the price for goods and services using either of the two price
controls only when it is not satisfied with the market price failure.
One short term benefit of price ceiling is imposing inexpensive
goods or services especially to low-income workers while for price floor is determining
a minimum value for wage to ensure minimum standard status of living. Thus,
price floor is more applicable in the labor market because it creates a
standardized minimum wage to protect workers’ rights. It is important to
consider such action to improve the financial status of the workers as well.
The longterm disadvantage of price ceiling is it results to
high demand and minimal supply which will lead to huge shortage, whereas for
price floor is increasing unemployment rate to offset expensive cost of labor
and benefits of employees.
For more detailed discussion of the answer, you can refer to the attached file.
Answer:
Unitary cost= $14
Explanation:
Giving the following information:
Production= 100,000
To produce these units of Product Fast, the company expects to spend $600,000 for materials and $800,000 for labor.
<u>First, we need to calculate the total cost and then the unitary cost:</u>
Total cost= 600,000 + 800,000= $1,400,000
Unitary cost= 1,400,000/100,000= $14
Answer: B
Explanation:
Control. Benefits. Cost. Net
A. (96/100*300,000)
288,0000.( 18,000.) 270,000
B. ( 94/100*300,000)
282,0000. (10,000) 272,000
C 97.5/100*300,000
292,500 (26,000) 266,500
The cost benefits analysis compares the cost to the benefits to be derived from a project and chosed the project with the highest benefits.
The reduction in the exposure means the reduced percentage is a benefit and the amount spent is a cost, subtracting the cost from the benefits gives us net benefits and the project with the highest net benefits is chosen for implementation.
Answer:
D) $179 million
Explanation:
The computation of the interest tax shield for the year 2006 is shown below:
= Interest expense in the year 2006 × tax rate
= $510 million × 35%
= $178.50 million
Simply we multiply the interest expense with the tax rate for the particular year so that the correct amount can come
All other information which is given is not relevant. Hence, ignored it
Answer:
755 units
Explanation:
Given that,
variable cost per clock = $10.20
Selling price = $17
Fixed cost = $7,701
At old price,
Contribution margin:
= Selling price - Variable cost
= $17 - $10.20
= $6.8
Break even point:
= Fixed cost ÷ Contribution margin per unit
= $7,701 ÷ $6.8
= 1,132.5
Now, Suppose that Juniper raises its price by 20 percent, but costs do not change.
Selling price = $17 + ($17 × 20%)
= $17 + $3.4
= $20.4
Contribution margin:
= Selling price - Variable cost
= $20.4 - $10.20
= $10.2
New Break even point:
= Fixed cost ÷ Contribution margin per unit
= $7,701 ÷ $10.2
= 755 units
