Answer: B. In the short run, the typical firm increases its output and makes an above normal profit.
Explanation:
I have attached a graph to explain.
Originally the Perfectly Competitive Market is in a long run Equilibrium.
This means that at 5000 units the $20 selling price was as a result of Marginal Revenue being equal to Marginal Cost.
Now a sudden change in Demand has taken the price up which then forces the Marginal Revenue Curve upwards.
This will culminate with the Marginal Revenue Curve now intersecting the Marginal Cost curve at a higher point being point F so that profit can be maximised.
This higher level will thus lead to a higher output than 5000 units at point Q as the firm will increase output.
Notice that at that point the Marginal Revenue is higher than Average Total Cost meaning that an Above normal profit is being made.
Do react or comment if you need any clarification.
Answer
<em>Correct comma splice, Correct Fragment, Vary sentence types</em>
Explanation:
<em>From the question given, on how to improve this message i will use the following methods which are</em>
- <em>Correct comma splice</em>
- <em>Correct Fragments</em>
- <em>Vary sentence types</em>
<em>Comma splice: It is two independent clauses are put together incorrectly by a comma to make a sentence. To avoid this problem, an independent clause. must first be identified.</em>
<em>Correct fragments: A fragments can be used correctly on two ways, </em>
<em>one is including the main clause in a passage, secondly Whether adding or connecting, you must use the right punctuation connecting the fragment to a main clause already in the passage. </em>
<em>Vary sentence types: when you can combine more ideas to develop more complex sentences, when you noticed too many short sentences.</em>
Answer:
- The price buyers will pay will be higher
- The tax on T shirts will cause a dead weight loss
- There will be a decrease in T shirts sold
Explanation:
In this scenario when curve for demand and is not perfectly inelastic it means that with an increase in price there is a fall in the amount of a good demanded.
So when tax is imposed on the T shirts the producers will have a higher cost of production. This is transfered to the buyer in form of higher prices.
Since the increase in price reduces quantity demanded, the buyer will buy less T Shirts at the higher price
Dead weight loss is a cost to society as a result of inefficiency non the market.
When taxes are applied supply and demand go out of equillibrum as prices are now higher. Therefore tax imposition causes a dead weight loss.
Answer:
b. $7,400
Explanation:
The computation of the depreciation expense for year 2 under the units-of-production method is shown below:
= (Original cost - residual value) ÷ (estimated useful miles)
= ($48,000 - $8,000) ÷ (100,000 miles)
= ($40,000) ÷ (100,000 miles)
= $0.40 per mile
Now for the second year, it would be
= Production miles in second year × depreciation per bolts
= 18,500 miles × $0.40 per mile
= $7,400
