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Lilit [14]
3 years ago
6

Interglobal Paper Company has asked for your help in comparing its present computer system with a new one its board of directors

would like to see implemented. Proposed system and present system costs are as follows:
Year Proposed System Costs Present System Costs

Year 1

Equipment Lease $20,000 $11,500

Salaries 30,000 50,000

Overhead 4,000 3,000

Development 30,000 0

Year 2

Equipment Lease $20,000 $20,700

Salaries 23,000 55,000

Overhead 4,400 5,300

Development 12,000 10,000

Year 3

Equipment Lease $20,000 $30,500

Salaries 36,000 60,000

Overhead 4,900 3,600

Development 0 0

Year 4

Equipment Lease $20,000 $10,500

Salaries 39,000 46,000

Overhead 5,500 4,000

Development 0 0

a. Using break-even analysis, determine the year in which Interglobal Paper will break even.

b. Graph the costs and show the break-even point.
Business
1 answer:
madam [21]3 years ago
8 0
The answer is b idk why but i think im right
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Answer:

B. monopoly firms but not for competitive firms.

Explanation:

Marginal revenue can become negative for monopoly firms but not for competitive firms.

A monopolist’s marginal revenue is always less than or equal to the price  of the good.

Marginal revenue is the amount of revenue the firm receives for  each additional unit of output. It is the difference between total revenue – price  times quantity – at the new level of output and total revenue at the previous  output (one unit less).

Since the monopolist’s marginal cost curve lies below its demand curve.  When a monopoly increases amount sold, it has two effects on total revenue:

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For a competitive firm there is no price effect. The competitive firm can sell  all it wants at the given price.

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<u>Marginal revenue can become negative – that is, the total revenue decreases from one output level to the next. </u>

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