If job a and job b are identical in all aspects, except that job b pays higher wages, what will happen over time?

hen entry barriers into a market are low, firms will tend to earn zero economic profit in the long run because a. profit-seeking

tamaranim1 [39]

Answer:

The correct answer is B

Explanation:

Economic profit is the difference among the revenue received from the sale of the output and the cost of all inputs used and opportunity cost.

Zero economic profit, it is the situation where the firm is earning the same if its resources were employed in the next alternative which is best.

When the entry barriers in the market are low, then the firm will have the tendency of having a zero economic profit in the period of long run, as the profit which is short run will attract the extra suppliers which will result in down in the market price of the product.

3 0

3 years ago

Profit Margin, Investment Turnover, and Return on Investment

77julia77 [94]

Answer:

A) To calculate the company's return on investment we have to calculate the profit margin and the total asset turnover first:

Profit margin = net income / total sales

Profit margin = $13,200,000 / $82,500,000 = 0.16 x 100 = 16%

Total asset turnover = total sales / total assets

Total asset turnover = $82,500,000 / $5,000,000 = 16.5 x 100 = 1,650%

The DuPont formula for calculating return on investment is:

ROI = profit margin x total asset turnover

ROI = 0.16 x 16.5 = 2,64 x 100 = 264%

B) If expenses decrease by $350,000 then:

Profit margin = $13,550,000 / $82,500,000 = 0.1642 x 100 = 16.42%

Total asset turnover = $82,500,000 / $5,000,000 = 16.5 x 100 = 1,650%

ROI = 0.1642 x 16.5 = 2,71 x 100 = 271%

4 0

3 years ago

For each of the following item below, indicate to which category of elements of financial statements it belongs.

sergiy2304 [10]

Answer:

Explanation:

As we know that

The statement of stockholder's equity includes common stock and retained earnings.

The net income is a difference between the total revenues and total expenses

The assets, liabilities and stockholders ' equity are reported in the balance sheet

So, the categorization is shown below:

a. Retained earnings = Equity

b. Sales = Revenues and shown in the income statement

c. Additional paid-in capital = Equity

d. Inventory = Current assets

e. Depreciation = Expense and shown in the income statement

f. Loss on Sale of equipment = Losses

g. Interest payable = Current liabilities

h. Dividends = Shown in the retained earning statement in a negative amount

i. Gain on sale of investment = Gains

j. Issuance of common stock = Owners investment

7 0

3 years ago

Suppose there are only two types of goods to consume: food and leisure. An average Californian citizen has a daily income of $10

Juliette [100K]

Answer:

Californian citizen

Explanation:

For a Californian citizen, the maximum number of meals and units of leisure they could possibly acquire per day are:

$M_C = \frac{\$100}{\$20} =5\\L_C = \frac{\$100}{\$10} =10$

For a Mississippi citizen, the maximum number of meals and units of leisure they could possibly acquire per day are:

$M_M = \frac{\$50}{\$10} =5\\L_M = \frac{\$50}{\$10} =5$

Both citizens can acquire the same number of meals, but the Californian citizen can acquire twice as many units of leisure than the Mississippi citizen. Therefore, the Californian citizen is more well-off in terms of the bundles of goods they can consume.

8 0

4 years ago

S&P Enterprises sold 10,000 units of inventory during a given period. The level of inventory of the manufactured product rem

nignag [31]

Answer:

Option A Net income will be the same under both variable and absorption costing.

Explanation:

The condition here given is:

Production Units = Sales units

Now under such conditions their is no finished goods and all the fixed costs are absorbed in the units produced in the absorption costing which means all the fixed production costs are part of the cost of goods sold.

In variable costing system, the fixed costs are not absorbed in the units and deducted as period cost.

So this means no cost is left which is not deducted from the revenue and this gives us net income that is same amount when we either use variable costing or use absorption costing. But remember that this is only possible when the production units are equal to sales units.

8 0

3 years ago