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2 years ago

Classify the source of market failure in each case listed.

Business

1 answer:

Len [333]2 years ago

6 0

Answer:

Market Power

Externality

Explanation:

A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced. Government can discourage the production of activities that generate negative externality by taxation. Taxation increases the cost of production and therefore discourages overproduction. Tax levied on externality is known as Pigouvian tax.

Government can regulate the amount of externality produced by placing an upper limit on the amount of negative externality permissible

Coase theorem has been proposed as a solution to externality. According to this theory, when there are conflicting property rights, bargaining between parties involved can lead to an efficient outcome only if the bargaining cost is low

The utility company is a monopoly

A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.

An example of a monopoly is a utility company

A natural monopoly occurs due to the high start-up costs or a large economies of scale.

Natural monopolies are usually the only company providing a service in a particular region

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2. Marginal analysis is sometimes called "thinking on the

antiseptic1488 [7]

Answer:

fly.

Explanation:

Thinking on the fly is the act of analyzing something quickly and sometimes without all the facts.

6 0

2 years ago

jacob owns a policy that pays a death benefit only if he dies within the 20-year policy period. if jacob dies anytime that the p

galina1969 [7]

Jacob owns a policy that pays a death benefit only if he dies within the 20-year policy period. if jacob dies anytime that the policy is in force, his beneficiary will receive $100,000. the premium that jacob pays for this policy will be the same throughout the 20-year policy period. jacob owns A level term policy.

A purposeful set of rules designed to direct behavior and produce logical results is called a policy. A policy is a declaration of intent that is carried out through a method or protocol. Typically, a governance board inside a company adopts policies. Both subjective and objective decision-making can benefit from policies.

A government or other institution's policy may be a legislation, rule, process, administrative decision, inducement, or voluntary practice. Resource allocations frequently reflect policy decisions. Policies in many different industries can affect health.

Learn more about policy here

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5 0

2 years ago

Colt Carriage Company offers guided horse-drawn carriage rides through historic Charleston comma South Carolina. The carriage b

chubhunter [2.5K]

Answer:

1) Colt Carriage Company

Income Statement

For the month ended April 202x

Revenues:

Adults passengers $186,300
Children $81,000
Total revenues $267,300

Variable costs:

City fees $26,730
Souvenirs $7,425
Brokerage fees $11,340
Carriage drivers $52,650
Total variable costs $98,145

Contribution margin $169,155

Period costs:

Depreciation $2,900
Horse leases $48,000
Marketing expenses $7,350
Payroll expenses $7,600
Total period costs $65,850

Operating profit $103,305

2) If the total amount of passengers increase by 10%, then all variable costs will increase by 10% except brokerage fees which would increase only by 6%. Revenues should also increase by 10%. Period costs should not change.

Contribution margin should increase by 10.29% and operating profit would increase by 16.81%.

Explanation:

since the information is not complete, I looked it up:

Revenues

13,500 passengers:

8,100 x $23 = $186,300

5,400 x $15 = $81,000

total $267,300

variable costs:

fees paid to the city 10% of total revenue

souvenirs $0.55 per passenger

brokerage fees 60% of total tickets x $1.40

carriage drivers $3.90 per passenger

fixed costs:

depreciation $2,900

horse leases $48,000

marketing expenses $7,350

payroll expenses $7,600

4 0

3 years ago

On July 1, Goblette Company sold some machinery to another company. The two companies entered into an installment sales contract

malfutka [58]

Answer:

The value of all future payments discounted by the interest rate

Explanation:

Since the purchase of the asset is by installments to be paid in the future. The present value to be recognized is the sum of the future payments discounted at the predetermined interest rate.

The first payment due now will not have to be discounted but future payments will have to be discounted to ascertain the present value of the asset to be recognized in the balance sheet.

7 0

3 years ago

Read 2 more answers

Choose the letter of the item that best completes the statement or answers the question. Last year Jackson earned $500,000, Vele

Vitek1552 [10]

1. According to their states’ tax laws, which require each one to pay a tax of $500 despite their different earnings, the best description of the tax is (c) regressive.

<h3>What is a regressive tax system?</h3>

A regressive tax system is one where taxpayers pay a disproportionate share of the tax burden, given their earning levels.

A regressive tax system is not proportional or progressive.

2. An example of an excise tax is (b) tax on perfume.

3. The amount Rose Chin paid for the purchase of school supplies based on the state sales tax of 5% is a) $12.60 ($12 x 1.05).

4. An example of a property tax is a) a tax based on the value of one's home.

5. The best example of the ability-to-pay principle is b) income tax.

6. An example of a tax based on the benefits-received principle is (a) bridge toll.

7. In the United States, taxes are used to accomplish all of the following except (c) determine which brands consumers buy.

8. For the apartment tenants, the tax is d) a sales tax.

9. The ultimate tax-burden bearer in question 8 is (d) the tenants.

10. An example of a protective tariff is (d) tax on the importation of foreign-made cars.

Thus, while income tax is mostly progressive in the United States, sales taxes are proportional, while some taxes are regressive because the amount paid is fixed and does not depend on the ability-to-pay principle.

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5 0

2 years ago