Answer:
A. Both types of firms produce at minimum ATC.
Explanation:
A monopolistic competition is when there are many buyers and sellers of differentiated goods and services.
A monopolistic competition is characterised by little or no barriers to entry or exit of firms. In the short run, if a firm is earning economic profit, in the long run, firms enter into the industry and drive economic profit to zero. Also, if the short run, firms are earning economic loss, in the long run, firms would leave the industry and economic profit would be zero.
A monopolistic competition doesn't produce at minimum ATC and as a result it operates with excess capacity.
A perfect competition is characterised by many buyers and sellers of homogenous goods and services.
There are no barriers to entry or exit of firms into the industry. So firms make zero economic profit in the long run.
It produces at minimum atc and where Mr equals mc.
I hope my answer helps you
Answer:
I would be willing to pay $ 32.83 for each share of Johnson Enterprises
Explanation:
The price per share= next year dividend/required rate of return-growth rate
next year dividend is $3.25
required rate of return is 15%
dividend growth rate in perpetuity is 5.1%
share price=$3.25/(15%-5.1%)
share price =$3.25/9.9%
share price=$3.25/0.099
share price=$ 32.83
The share can be sold today for $ 32.83 ,which is the present value of dividends payable in perpetuity(forever)
Answer:
Provided in Explanation
Explanation:
This is a very general question however I’ll try to answer it to the best of my knowledge.
If I use my own assumptions then these will be the Projections:
Selling Price $79.99 Selling Price $69.99
Cost of Sales/unit $40.00 Cost of Sales/unit $40.00
Expenses/unit $15.00 Expenses/unit $15.00
Demand @ $79.99 1000 Demand @ $69.99 1200
Sales $79,990.00 Sales $83,988.00
Cost of Sales $40,000.00 Cost of Sales $48,000.00
Expenses $15,000.00 Expenses $18,000.00
Profit $24,990.00 Profit $17,988.00
The final decision however relies on the Price Elasticity of the Product. If the Product is Price elastic then lowering the Price will lead to a significant rise in Demand. However if the Product is Price inelastic then lowering the Price will not lead to a significant rise in Demand and thus profit margins will be lowered. If the Product is Price inelastic then it is better to increase prices in order to gain more profits. In the case of Unit Elasticity the change in Demand will be at the same proportion as price change so it won’t be of any use to change the Price.
Answer:
The controllable variance for the month was $1,709 unfavorable
Explanation:
Controllable variance: The controllable variance show a difference between actual overhead expenses incurred and budgeting operating level based on direct labor hour.
In mathematically,
Controllable variance = Actual overhead expenses - budgeting operating level based on direct labor hour
where,
Actual overhead expenses = $11,227
And, budgeted operating level based on direct labor hour
= budgeted operating level × direct labor per hour
= 6,160 × $2.10
= $12,936
Now, put these values on the above formula:
So,
Controllable variance = $11,227 - $12,936 = $1,709 unfavorable
Hence, the controllable variance for the month was $1,709 unfavorable
