Answer:
The correct answer is letter "B": Penetration pricing.
Explanation:
Penetration pricing unveils new goods or services at an initially low price to draw buyers away from rivals. Penetration pricing allows a business to create barriers to market entry by removing them. <em>The new company hopes that consumers will continue to use their products even after prices increase to normal levels.</em>
Answer:
Explained below:
Explanation:
The equity method of accounting is the method of producing investments in other companies. If a company invests in another corporation and holds 20 to 50 % share of the particular corporation and hence has a notable impact on the latter's administration then the investor (company) should apply the equity method of accounting to this investment and reports such investments on its balance sheet as an asset..
Answer: The answers are given below
Explanation:
a. What is its percentage rate of return?
From the question, we are told that the firm is earning $5.50 on every $50 invested by its founders. The percentage of return will now be:
= $5.50/$50 × 100%
= 0.11 × 100%
= 11%
b. Is the firm earning an economic profit? If so, how large?
The economic profit will be the difference that exists between the percentage of return which is 11% and the normal rate of profit which is 5%. This will be:
= 11% - 5%
= 6%
The firm is earning economic profit of 6%.
c. Will this industry see entry or exit?
There will be entry into the industry. This is because the percentage of return which is 11% is greater than the normal rate of profit which is 5%.
d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?
The rate of return earned by firms in this industry once the industry reaches long-run equilibrium will be 5% which is the normal rate of profit in the economy.
When one group controls an industry or market by being the only provider, this is called MONOPOLY.
Mono - Greek monos means one or single
Poly - Greek polein means to sell.
Monopoly is a market where only one sells a certain good or service. In this type of market there is no competition thus the monopolist is not driven to improve his commodity because consumers have no other choice but to buy his product.
