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zzz [600]
3 years ago
10

Assume that the market is perfectly competitive. If the cost function for John's Shoe Repair is �(�) = 100 + 10� − �) + 3 4 �4,

what is the firm's marginal cost function? What is its profit-maximizing condition if the market price is p? What is its short-run supply curve?
Business
1 answer:
kirill [66]3 years ago
5 0

Answer:

Explanation:

C(q) = 100+10q-q^2+(1/3)q^3

To find the firm marginal cost function:

Take the derivative with respect to q

MC = 10 - 2q + q^2

Assuming that the market price is p , then the profit maximising condition is:

MR = MC

p = 10 - 2q + q^2

The short-run supply curve is the marginal cost curve that lies above the average variable cost.

The average variable cost is:

AVC =VC/Q

AVC = (10q-q^2+(1/3)q^3)/Q

AVC = 10 - q + (1/3)*q^2

So, the short-run supply curve is:

SRS = 10 - 2q + q^2 if p > 10 - q + (1/3)*q^2

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Quip Corporation wants to purchase a new machine for $300,000. Management predicts that the machine will produce sales of $200,0
butalik [34]

Answer:

net present value NPV = $79800

so correct option is D) $79,800

Explanation:

solution

we knw that Net Present value = PV of cash inflow - PV of cash outflow    ............1

so here PV of cash outflow = $300000  

and Net sales = $200000

expenses = $80000

Depreciation =  \frac{300000-50000}{5}

Depreciation =  $50000

so Net income before taxes  = Net sales - Depreciation - expenses

Net income before taxes =  $200000  - $80000 - $50000

Net income before taxes =  $70000

and Tax expenses @ 40% = $28000

so

Net income = Net income before taxes - Tax expenses

Net income = $70000  - $28000

Net income = $42000

and

Depreciation = $50000

Net cash inflow =  Net income + Depreciation

Net cash inflow =  $42000  + $50000

Net cash inflow = $92000

and

PVIFA @ 10% 5 years = $3.7908

so

PV of cash inflow = $348755

PV of salvage value = $50000 ×0.6209

PV of salvage value = $31045

and

so here  Total PV of total cash inflow = $379800

and

net present value  NPV =  Total PV of total cash inflow - PV of cash outflow

net present value NPV = $379800 - $300000

net present value NPV = $79800

so correct option is D) $79,800

7 0
3 years ago
A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year,
Sophie [7]

Answer:

The appropriate answer is "$22,305".

Explanation:

The given values are:

Estimated uncollectible,

= $22,750

Credit balance in allowance,

= $445

Now,

The bad debt expense will be:

= Estimated \ uncollectible-Credit \ balance \ in \ allowance

By substituting the values, we get

= 22750-445

= 22305 ($)

5 0
2 years ago
A perfectly inelastic supply curve means that … a) a shift in demand will cause the quantity supplied to increase to infinity. b
Jet001 [13]

Answer: A perfectly inelastic supply curve means that<u><em>  the quantity supplied is completely fixed.</em></u>

Perfectly inelastic supply states that supply is completely fixed. Therefore it is not affected by the change in price level.

<u><em>Therefore, the correct option in this case is (e)</em></u>

5 0
3 years ago
The following budget information is available for the Arch Company for January Year 2: Sales $ 860,000 Cost of goods sold 540,00
igomit [66]

Answer and Explanation:

The computation of the total budgeted selling and administrative expenses is shown below;

Utilities expense $2,800

Administrative salaries $100,000

Sales commissions 5 % of sales i.e. 5% of $860,000  $43,000

Advertising $20,000

Depreciation on store equipment $50,000

Rent on administration building $60,000

Miscellaneous administrative expenses $10,000

total budgeted selling and administrative expenses $285,800

3 0
3 years ago
A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to
ruslelena [56]

Answer:

A 6,500

Explanation:

The number of units to be sold is calculated as;

= (Pretax income + Fixed costs) ÷ Contribution margin

Given that;

Pretax income = $35,000

Fixed costs = $420,000

Contribution margin

= Selling price per unit - Variable cost per unit

= $200 - $130

= $70

= ($35,000 + $420,000) ÷ $70

= 6,500 units

6 0
2 years ago
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