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Marta_Voda [28]
4 years ago
13

A startup firm in a perfectly competitive market finds that its average total cost is higher than the market price. Since the fi

rm is incurring​ short-run losses, the management is debating whether to continue operations. Alex​ Ferguson, a senior​ manager, feels that this is a temporary phase and the firm should continue operations. Which of the​ following, if​ true, would support​Alex's argument?
A. The managers of the firm have worked for other firms that produced products with an even greater difference between average total cost and market price.

B. Other firms in the same industry have higher labor costs but lower raw material costs.

C. The current price of the product covers the variable cost of production.

D. Economic activity in recent months has been sluggish.

E. The price of the product is expected to remain stable over the coming months.
Business
1 answer:
vitfil [10]4 years ago
4 0

Answer:C. The current price of the product covers the variable cost of production.

Explanation:A perfectly Competitive market is market where all firms produce similar product,and none of the firm's is superior,all the firm's are price takers as they can not influence the market price.

A perfectly Competitive firm is a firm whose product demand changes at the slightest change in the price of the product,any firm that is perfectly Competitive will work with the already existing price level of the market for its products and services, a perfectly Competitive firm is also known as spruce taker as it is expected to sell According to the existing market price.

ALEX'S OPINION Will BE SUPPORTED IF TRUE ONLY IF THE CURRENT PRICE OF THE PRODUCT COVERS OR IT IS HIGHER THAN THE VARIABLE COST OF PRODUCING THE PRODUCT.

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Even though mass transit systems such as buses are available in most cities in the United States, many residents decide to drive
DIA [1.3K]

Answer:

Mass transit arrangement are accessible in most of cities in US but several individuals are not consuming it. Those individuals like to go workplaces in their won vehicle. There might be more than one response correct for the given problem. Sometime individuals do not perform according the economic method of thinking. They might be irrational also. According to me, presumptuous that all persons are rational and acting rendering to approach of thinking, the opportunity cost of riding a bus essential to be high for them. Individuals chooses to drive to work in their personal vehicles because opportunity cost of driving their personal vehicle to work is comparatively less for them. This is the maximum strong dispute among all given influences.  

Thus Option (1) is the correct answer

6 0
3 years ago
The Easton manufacturing Company is looking to replace its conveyor belt system. A new system will cost $345,000, and will resul
Paha777 [63]

Answer:

2.25 years

Explanation:

Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows

Amount recovered in year 1 : $-345,000 + $220,000 = $-125,000

Amount recovered in year 2 : -1250000 + 100,000 = $-25,000

-25,000 / 100,000 = 0.25

8 0
3 years ago
Dion has an auto repair business for high-end cars like a Porsche or Ferrari. He wants to market his services to Porsche, BMW, a
lozanna [386]

Answer:

d. classify firms according to their number of customers

Explanation:

Since Dion wants to market his services to these car firms, he should consult for data that can be used to classify firms according to the customers that they have.

It has been stated clearly that people have to drive to Lubbock dallas, or Austin to get their cars serviced, so the firms can beclassified according to the number of customers.

3 0
3 years ago
A classified income statement has four major sections—operating revenues, cost of goods sold, operating expenses, and non-operat
Advocard [28]

Answer: False

Explanation:

The statement in the question that a classified income statement has four major sections which are the operating revenues, cost of goods sold, operating expenses, and non-operating revenues and accounts receivables is not true.

It should be noted that a classified income statement is made up of the revenue, the expenses and the non operating revenues and expenses.

3 0
3 years ago
Anna recently opened a savings account in a federally insured bank; she made three deposits in the amounts of $100,000, $65,000
Ghella [55]
$250,000  
Federal Deposit Insurance Corporation (FDIC) was created by the 1933 Banking Act during the Great Depression (June 16 1933). It's purpose was to restore trust in the banking system. Initially, the insured limit was $2,500, but over the years it has increased. The limits over time are: 1934 – $2,500; 1935 – $5,000; 1950 – $10,000; 1966 – $15,000; 1969 – $20,000; 1974 – $40,000; 1980 – $100,000; 2008 – $250,000 The increase from $100,000 to $250,000 was intended on being temporary, but as mentioned in the question, wasn't reduced and is therefore still the current limit. So Anna will be insured up to the $250,000 limit.
4 0
3 years ago
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