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3 years ago

In the long run the prices charged by a firm in monopolistic competition will be

Business

1 answer:

kumpel [21]3 years ago

6 0

Answer: The correct answer is "d. equal to average cost, including the opportunity cost of capital.".

Explanation: In the long run the prices charged by a firm in monopolistic competition will be equal to average cost, including the opportunity cost of capital.

In long-term monopolistic competition, the demand curve will be tangent to the average long-term cost and the price set at this level. The benefits will be equal to zero and therefore there will be no entry or exit of companies.

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Which pricing policy do you think would be best suited for a small business introducing a new line of clothing and accessories?

EastWind [94]

Answer:

I think that a small business introducing a new line of clothing and accessories should use the penetration pricing policy. The penetration pricing policy prices their products very low to start out with to try and distract competitors from there competition and towards them.

Explanation:

Hope that helps!

4 0

3 years ago

I purchase a 10 percent coupon bond. Based on my purchase price, I calculate a yield to maturity of 8 percent. If I hold this bo

Vedmedyk [2.9K]

Answer:

B) 8 percent.

Explanation:

The yield to maturity is the expected rate of return of a bonds if held until maturity.

We are asked precisely for what rate are we receiving if held at maturity so we receive the yield to maturity.

That is a rate at which the discounted coupon payment and maturity payment matches the price we urchase the bonds.

8 0

2 years ago

Thornton Industries began construction of a warehouse on July 1, 2016. The project was completed on March 31, 2017. No new loans

igomit [66]

Answer:

THORNTON INDUSTRIES

AMOUNT OF INTEREST TO BE CAPITALIZED FOR THE YEAR ENDED DECEMBER 31, 2016 AND 2017

2016

July 1 - Dec 31 $400,000 *4.8%*6/12 = $9,600

Sep 30 - Dec 31 $600,000*4.8%*3/12 = $7,200

Nov 30 - Dec 31 $600,000*4.8%*1/12 = $2,400

Total Interest for 2016  $19,200

2017

Jan 1 - Dec 31 $1,600,000*4.8% = $76,800

Jan 30 - Dec 31 $540,000*4.8%*11/12 = 23,760

Total interest for the year 2017 $100,560

weightred average cost of capital =

$2,000,000*8% + $8,000,000*4%

$2,000,000 + $8,000,000

= 160,000 + 320,000

10,000,0000

=$480,000 / 10,000,000 = 0.048 = 4.8%

Explanation:

Interest to be capitalized on construction expenditure will be interest on the amount borrowed to finance such construction. the interest will be from commencement of the construction to the cessation period

6 0

3 years ago

A standard "money demand" function used by macroeconomists has the form ln( ) = + ln( ) + m β , 0 β1 GDP β2R Where m is the quan

kvasek [131]

Answer:

1.The money demand will rise by 1.154%

2. The money demanded will fall and for a 1% increase in interest , the money demanded will fall by 0.38%

Explanation:

1. Money demand function

ln(m) = β0 +β1 ln(GDP)+β2R

Suppose β1 = 1.5 , β2 = −0.04 , GDP = $ 100 & R = 3%

ln(m) = 1.5 ln ($100) - 0.04 X 0.03

ln(m) = 6.91

m = 1002.247

Suppose the GDP increases by 1%; the new GDP will be = $ 101

ln(m) = 1.5 ln ($101) - 0.04 X 0.03

ln(m) = 6.92

m = 1013.81

If the GDP increases by 1% ,the money demand will rise by 1.154%

If the interest rate increases from 3% to 4%

ln(m) = 1.5 ln ($100) - 0.04 X 0.04

ln(m) = 6.906155

m = $ 998.400

If the interest rate rises from 3% to 4% , the money demanded will fall and for a 1% increase in interest , the money demanded will fall by 0.38%

3 0

3 years ago

Since 1960, when the central american beef market began booming, over 25% of the rainforests have been cleared for cattle grazin

faust18 [17]

Since 1960, when the Central American beef market began booming, over 25% of the rainforests have been cleared for cattle grazing is a TRUE statement.

4 0

3 years ago