Answer:
a. 9%
b. Yes, the firm earning an economic profit of 2%
c. Yes, Industry will see entry or exits
d. Rate of return of economy = 7%
Explanation:
a. Percentage rate of return = Earning ÷ Investment by founders × 100
= $18 ÷ $200 × 100
= 9%
b. Company rate of profit - Rate of profit of economy
= 9% - 7%
= 2% > 0
Yes, the firm earning an economic profit of 2%
c. Yes, Industry will see entry or exits because industry is competitive in nature and would to like to compete to others by satisfying the consumers . In perfect competitive markets there will be no entry or exits and critical characteristics reason companies are free for entry and exit for marginal profits.
d. Industry is competitive , there will be supplier to serve the market and its hard to decide the price of the product.
Hence, the rate of return long run equilibrium earned by firm = Rate of return of economy = 7%
Answer:
It helps consumers tell producers when prices are too high.
Explanation:
The law of demand affirms that an increase in price results in reduced demand. It means that when prices increase, consumers will buy fewer quantities of a product or service. The law of demand shows the relationship between price and the quantity of a product consumers are willing to buy in the market.
Consumers can communicate with producers through the volume of products purchased. When the quantity purchased is low, producers will know the set prices are high.
False. You should worry MORE about business ethics when you work for yourself to ensure for a better business and avoid getting sued
Answer:
Amount reported in operating activities = $33,200
Explanation:
Given:
Cost of machine = $162,000
Accumulated depreciation = $101,000
Sales price = $52,800
Current year depreciation = $25,000
Computation:
Particular Amount
Cost of machine $162,000
<u>Less:</u><u> Accumulated depreciation $101,000</u>
<u>Book value of machine $61,000 </u>
Loss on sale[$61,000-$52,800
] $8200
Amount reported in operating activities = Current year depreciation + Loss on sale
Amount reported in operating activities = $25,000 + $8200
Amount reported in operating activities = $33,200
