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Dafna11 [192]
3 years ago
8

Baker Enterprises operates a midsized company that specializes in the production of a unique type of memory chip. It is currentl

y the only firm in the market, and it earns $10 million per year by charging the monopoly price of $115 per chip. Baker is concerned that a new firm might soon attempt to clone its product. If successful, this would reduce Baker’s profit to $4 million per year. Estimates indicate that, if Baker increases its output to 280,000 units (which would lower its price to $100 per chip), the entrant will stay out of the market and Baker will earn profits of $8 million per year for the indefinite future. 1. What must Baker do to credibly deter entry by limit pricing? 2. Does it make sense for Baker to limit price if the interest rate is 10 percent?
Business
1 answer:
Elodia [21]3 years ago
4 0

Answer:

Baker Industries manufactures two products: A and B. The company predicts a sales volume of 10,000 units for product A and ending finished-goods inventory of 2,000 units. These numbers for product B are 12,000 and 3,000, respectively. Bacon currently has 7,000 units of A in inventory and 9,000 units

Explanation:

It is currently the only firm in the market, and it earns $10 million per year by charging the monopoly price of $115 per chip. Baker is concerned that a new firm might soon attempt to clone its product. If successful, this would reduce Baker’s profit to $4 million per year. Estimates indicate that, if Baker increases its output to 280,000

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Sonia opened a yoga studio where she teaches classes and sells yoga clothing. Variable costs for Sonia's yoga studio include the
shusha [124]

Answer:

tank tops, and to some extent, wages paid to the other yoga instructors

Explanation:

Variable costs are costs that change as the level of activity in a business or production set-up changes. They differ from fixed costs which remain constant irrespective of the change in the level of activity.

For Sonia's yoga studio, variable costs will change as the number of students taking the yoga classes and those buying yoga clothing change. Accordingly, the identified costs for Sonia will react as follows to the change in the level of activity (number of customers and students).

  • The cost of tank tops: as customers buying yoga clothing increases, the cost spent on tank tops will necessarily increase.
  • Wages paid to the other yoga instructors: as more students enroll for yoga classes, Sonia, may increase the number of students in each class to an extent. However, if the number of students continue to increase beyond the limit for each class, Sonia may need to increase the number of classes and employ more instructors (or increase the number of hours for the current instructors), thus leading to an increase in wages. Thus, wages, though fixed in the short term, becomes variable when activity increases significantly.
  • Lease on the studio space: lease will remain fixed since the space occupied as the yoga studio is the same.
  • Insurance on the studio: the insurance cost on the studio will equally remain fixed since it will be a percentage of the value of the studio.

Therefore, the cost of the tank tops and the wages paid to the other yoga instructors (to some extent) are variable costs.

6 0
4 years ago
Blanco Company purchased 200 of the 1,000 outstanding shares of Darby Company's common stock for $600,000 on January 2, 2018. Du
Kruka [31]

Answer:

$660,000

Explanation:

The computation of the equity investment is shown below:

= (Common stock balance) + (Earnings × purchased shares ÷ Total outstanding shares) - (dividend × purchased shares ÷ Total outstanding shares)

= ($600,000) + ($400,000 × 200 shares ÷ 1,000 shares) - ($1,00,000 × 200 shares ÷ 1,000 shares)

= $600,000 + $8,0000 - $20,000

=$660,000

5 0
4 years ago
What product cost is listed as both a prime cost and a conversion cost?
Oksana_A [137]
What do you mean by thta like polo true relegion like what

5 0
4 years ago
What was the one reason we study ethics is to see whether the moral beliefs we already hold are consistent and philosophically j
Diano4ka-milaya [45]

Answer:

The statement is: True.

Explanation:

Ethics is the field of philosophy that studies human behavior, what is right and what is wrong, the good and bad, the moral, well being, virtue, happiness, and duty and how they affect the day by day activities of individuals according to the society they live in.

One of the reasons to study ethics is to verify if the beliefs we already hold can be justified.

4 0
3 years ago
_____ create computer programs by using their knowledge of computer science, math, and other disciplines. Select the choice that
Burka [1]

Answer:

B. Software designers

Explanation:

Software designers create new ideas and develop them into user-friendly computer software. They are also known as software developers. They apply computer coding and programming skill to perform their functions. Software designers create computer games, operating systems, and other software programs. They also design programs customized to meet specific customer requirements.

8 0
3 years ago
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