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lisov135 [29]
3 years ago
5

Both the Onus ferry operator in the monopoly market and each of the Yuri ferry operators in the perfectly competitive market wil

l want to produce at the point that the marginal revenue is equal to the marginal cost. Explain in detail the two reasons that the monopoly’s marginal revenue will always be less than its price while the marginal revenue in the perfectly competitive market will always be equal to the market price. (2 points)
Business
1 answer:
Lisa [10]3 years ago
3 0

Answer: Please refer to Explanation.

Explanation:

Monopoly.

The 2 reasons why the monopoly’s marginal revenue will always be less than its price are;

a) Even though Monopolies have very large influence on the prices of goods and services they offer, for a Monopoly to sell more goods, they generally have to lower their prices. This will lead to a situation where Marginal Revenue, which is the additional revenue made per additional unit sold will be less than Price because additional revenue for a new unit will be less than the last one because prices are dropped .

b) A Monopoly's demand schedule is downward sloping. This means that demand rises as prices drop. As prices drop therefore, more goods will be sold but the marginal revenue will be less because prices had to be dropped to get an additional unit to be sold. That unit therefore will bring in less revenue than the last unit.

Perfectly Competitive Market

In such a market, the seller is a Price Taker. This means that sellers in this market do not sell at a price that they want but rather at a price the market has established to be the Equilibrium. This is because of the high competition in the market. Since they are all selling at the same price, this means that every additional revenue they get is the same as the price the market charges. This means that Price equals Marginal Revenue in this market.

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If a firm can raise market price by reducing its output, then:
Dahasolnce [82]

If a firm can raise the market price by reducing its output, then It faces a downward-sloping demand curve.

If a superbly aggressive company increases its rate above the prevailing market fee, it'll lose its entire marketplace proportion, and income will lessen to 0.

Monopolists aren't allocatively efficient, due to the fact they do not produce at the amount wherein P = MC. As a result, monopolists produce less, at a higher average cost, and rate a higher price than could a combination of firms in a superbly competitive enterprise.

The monopolist will choose the income-maximizing degree of output in which MR = MC, and then fee the fee for that quantity of output as decided by using the marketplace call for curve. If that rate is above average fee, the monopolist earns high-quality earnings.

Learn more about the demand curve here: brainly.com/question/9387886

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6 0
2 years ago
A boss tells her employee, "If you don't get me those figures in the next five minutes, you're fired!" This is an example of whi
kiruha [24]

Answer:

Coercive power

Explanation:

This boss is exercising coercive power. Such a power stems from a place of authority. The boss is hereby using force to ensure that this employee follows orders. In a situation whereby the employee fails to do what is expected of him, such a boss has the power to punish this boss for not complying with set instructions. This type of power can be used to make sure that Employees remain disciplined in an organization.

4 0
3 years ago
Aspen Company estimates its manufacturing overhead to be $515,000 and its direct labor costs to be $515,000 for year 2. Aspen wo
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Answer:

COGS    3807 debit

FG          7896 debit

WIP         2397 debit

  Factory Overhead  14,100 credit

--to record the underapplication of overhead--

Explanation:

overhead rate:

\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate

$515,000 overhead /  515,000 labor cost = $1

each labor cost generates a dollar of overhead.

221,400 x 1 =   221,400 overhead in COGS

459,200 x 1 = 459,200 overhead in Finished Goods

139,400 x 1 =   139,400 overhead in WIP inventory

Total applied  820,000

Actual            805,900

Underapplied    14,100

Now we weight each concept and determiante the portion underapplocated in each concept

\left[\begin{array}{cccc}Item&Value&Weight&Allocated\\COGS&221400&0.27&3807\\FG&459200&0.56&7896\\WIP&139400&0.17&2397\\&&&\\Total&820000&1&14100\\\end{array}\right]

4 0
3 years ago
Suppose that real GDP is currently $ 13.8 trillion and potential real GDP is $ 14.0 trillion, or a gap of $ 200 billion. The gov
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Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

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