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tia_tia [17]
3 years ago
13

Scenario 14-4 The information below applies to a competitive firm that sells its output for $40 per unit.

Business
2 answers:
valina [46]3 years ago
8 0

Answer:

The magnitude which has the same value after change in units of output from 150 to 151 is Average revenue cost.

Further Explanation:

Competitive market is that market in which there are large number of buyers and sellers selling homogeneous products.

In a competitive market:

Price = Marginal cost = Marginal revenue = Average revenue

<u>The various types of cost and revenue are: -</u>

  • Total cost: The cost incurred on production of goods and services. It is sum of total fixed cost and total variable cost.
  • Total Fixed cost: The cost which does not change with the change in output. Total fixed cost incurred even when production is zero.
  • Total Variable cost: The cost which changes with change in output . It includes cost of raw material and contracted labors.  
  • Marginal Cost: The increase in total cost due to increase in one unit of production.
  • Average cost: The total cost per unit.
  • Average variable cost: The total variable cost per unit.
  • Average fixed cost: The total fixed cost per unit. The AFC declines continuously and never touches 0 or turn negative.
  • Total revenue: The total money collected by selling the output in the market.
  • Marginal revenue: The increase in total revenue due to selling one additional unit in the market.
  • Average revenue: The total revenue per unit.

<u>The given information is as follows: -</u>

  • Price = $40
  • Average total cost when firm produces 150 units = $24.50
  • Average total cost when firm produces 151 units = $24.55

Average revenue is calculated as follows:

Thus AR is constant

Key words: Cost, Total cost, Total fixed cost, Total variable cost, Marginal cost, Total revenue, Average revenue, Marginal revenue, competitive market.

Lear More:

https://brainly.in/question/4257056  

brainly.com/question/4078562

Dominik [7]3 years ago
6 0

The average revenue has the same value at Q = 150 and Q = 151.

Further explanation:

Average fixed cost: The fixed cost per unit is termed as the average fixed cost. The fixed cost does not change with the level of output. However, the average fixed cost changes along with the level of output.

Total revenue: The total revenue refers to the amount of revenue generated during a particular period of time. The total revenue is the total of the revenues.

Total cost: The total cost is the sum total of the variable and fixed cost during the year. The total cost represents all the direct, and indirect costs occurred on a product.

Average total cost: The total cost per unit is also termed as the average total cost. The average total cost represents the cost, which is computed by dividing the total cost with the number of units manufactured during the year.

Calculate the total revenue when the quantity of output is 150 units:

It is given that the output is sold at $40 per unit.

\text{Total revenue at 150 units}=\text{Number of units produced}\times\text{Sales price per unit}\\ =150\times\$40\\=\$6,000

Therefore, the total revenue when the quantity of output is 150 units is <u>$6,000.</u>

Calculate the average revenue when the quantity of output is 150 units:

\text{Average revenue}=\dfrac{\text{Total Revenue}}{\text{Number of units}}\\=\dfrac{\$6,000}{150\text{units}}\\=\$40

Therefore, the average revenue when the quantity of output is 150 units is <u>$40.</u>

Calculate the total revenue when the quantity of output is 151 units:

It is given that the output is sold at $40 per unit.

\text{Total revenue at 151 units}=\text{Number of units produced}\times\text{Sales price per unit}\\ =151\times\$40\\=\$6,040

Therefore, the total revenue when the quantity of output is 151 units is <u>$6,040.</u>

Calculate the average revenue when the quantity of output is 151 units:

\text{Average revenue}=\dfrac{\text{Total Revenue}}{\text{Number of units}}\\=\dfrac{\$6,040}{151\text{units}}\\=\$40

Therefore, the average revenue when the quantity of output is 151 units is <u>$40.</u>

Justification for correct and incorrect answer:

a.

Average fixed cost: The average fixed cost changes along with the change in output level. The average fixed cost is different from that of fixed cost. Hence, this choice is incorrect.

b.

Average revenue: The average revenue is $40 at Q = 150 units and Q = 151 units. The average revenue is equal at both the levels of the output. Hence, this choice is correct.

c.

Total cost: The total cost is not the same at both the levels of the output. The total cost is different for Q = 150 units, and Q = 151 units as the average total cost is also different for both output levels. The total cost increases when the output level changes. Hence, this option is incorrect.

Learn more

1. Breakeven point and contribution margin brainly.com/question/12989446

2. Direct materials efficiency variance brainly.com/question/12987884

3. Cost of materials

brainly.com/question/4783765

Answer details  

Grade: Senior School

Subject: Cost Accounting

Chapter: Cost Behavior

Keywords: Scenario 14-4, the information below applies to, competitive firm, scenario 14-4 the information below applies to competitive firm, when the firm produces, which of the following magnitudes, average fixed cost, average revenue, average cost per unit, average total cost, at Q = 150 and Q = 151, represent the quantity of output, refer to scenario 14-4, when the firm produces and sells 150 units of output.

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Answer:

1. a) Location,

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Farmer traders consider location as an important element for their crops, the location depends on the quality of the land and the taxes it will pay, and the location of their crop is important for the transport of their products to ensure they arrive in the best condition to the market.

Likewise, the farmer considers as an influential factor how much profit he will obtain with the harvested product, choosing to cultivate the one that produces the greatest benefits, also he must consider having all the labor and resources that are necessary to carry out his harvest and be able to transport it to market it.      

2. Dairy producers need to consider the proximity of farms to the distribution market because the product has a limited time to go expire .

Explanation:

Dairy products are the most delicate and difficult to transport since they have a short time to expire, this is one of the reasons that commercial farmers should take into account that the location of their farm is at a considerable distance from the market, in this way being able to transport their product more safely and distribute it without fear that it expires and lose all their profits.

3. A commercial farmer is concerned with two costs, one of which is the cost of transportation and the other cost is whether there will be a benefit to his crop.

Explanation:  

Commercial farmers at the time of cultivation consider two very important costs for them, one of them the cost of transporting their products to the place of distribution, so they must ensure that it is not very high since it is also important for them the benefit they will get, for this reason, farmers take care that the investment is less so they can enjoy good profits.

   

4. Von Thunen's theory mentions that the distance to the market is a critical point for farmers. Von Thunen explains that a farmer's earnings may decrease the further from the market where he sells his products.

Explanation:

5.  1. One of Von Thunen's assumptions is that there is only one market available and it is self-sufficient without outside influence.

    2. Another assumption is the physical environment is uniform; without rivers, mountains, etc.

    3. And one last assumption is that all farmers act to maximize profits.

Explanation:

1. In Von Thunen's first assumption, he considers there is only one market available and it does not need external influences, but this assumption may not be so correct since there cannot be a single market due to the consumer demand that exists and because there are other farmers from different cities that will bring their products, also cities need an external influence for change, and changes are necessary for the growth of the city.

2. In his theory, Von Thunen mentions the physical environment of the places for agricultural production is uniform, which is difficult due to the landforms that create modifications in the terrain, this uniformity that Thunen mentions could only be achieved if the grounds were modified by men.

3. Thunen's last assumption mentions a very successful situation where farmers carry out actions to obtain the greatest profits, they will continue working to continue obtaining the best benefits.

6. 1. In the middle ring is the market. The market is central because it is the most important part of the city and is easily accessible from the surrounding areas.

   2. The next ring consists of intensive farming and dairy. These products are closer because they are in higher demand and other products can expire.

  3. The next ring is the forest. Wood was also in high demand due to the fact that it was used for heating and cooking. And it had this location because the wood was very heavy and difficult to transport.

  4. The penultimate ring was used for extensive cultivation as bread grains. These are lighter, which makes them easier to transport and cost less money.

  5. And finally, the final outer ring is used for livestock. Animals can be born and raised further from the market because they transport themselves, which means there is no need for fuel, saving the farmer money.

Explanation:  

Von Thunen in his theory mentioned the importance of geographical distribution in agriculture, in which merchant farmers could take advantage of the conditions of the land. For Thunen the distribution and location of the land in an appropriate way would generate the best benefits, for it must organize from the most essential and difficult to transport to the easiest to transport, in this way, for Von Thunen the rings in the markets should be formed.

   

<em>I hope this information can help you.</em>

5 0
3 years ago
The following data are for the Akron Division of Consolidated Rubber, Inc.: Sales $ 800,000 Net operating income $ 50,000 Averag
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Answer:

ROI 87.5%

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Stock Holders equity = investment = 80,000

The shareholders invest this amount to generate

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