It results in lower short run average cost in economies of sale .
<h3>Economies of scale</h3>
Economies of scale refers to the situation where, as the quantity of output goes up, the cost per unit goes down. This is the idea behind “warehouse stores” like Costco or Walmart. In everyday language: a larger factory can produce at a lower average cost than a smaller factory. Figure 2 illustrates the idea of economies of scale, showing the average cost of producing an alarm clock falling as the quantity of output rises. For a small-sized factory like S, with an output level of 1,000, the average cost of production is $12 per alarm clock. For a medium-sized factory like M, with an output level of 2,000, the average cost of production falls to $8 per alarm clock. For a large factory like L, with an output of 5,000, the average cost of production declines still further to $4 per alarm clock.
One prominent example of economies of scale occurs in the chemical industry. Chemical plants have a lot of pipes. The cost of the materials for producing a pipe is related to the circumference of the pipe and its length. However, the volume of chemicals that can flow through a pipe is determined by the cross-section area of the pipe.
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Answer:
the supply of dollars is likely to exceed the demand in the foreign exchange market, ceteris paribus.
Explanation:
A deficit can be defined as an amount by which money, falls short of its expected value.
In Financial accounting, deficit is usually as a result of revenue falling below expenses or expense exceeding revenue at a specific period of time.
For instance, if in a country liabilities exceeds assets or import exceeds export there would be a deficit in the financial account of the country.
This is simply as a result of a country having to import more goods and services than it is exporting to other countries in trade.
Generally, a deficit on the current account is because the value of goods and services exported is lower than the value of goods and services being imported in a particular country.
If the United States imports more than it exports, then the supply of dollars is likely to exceed the demand in the foreign exchange market, ceteris paribus (all things being equal) because it is not selling its goods and services to other countries.
Answer:
It would be better to buy the car.
Nominal 26,446.81 (break even resale price)
Explanation:
We solve the present value of the salvage value at 6% APR
Maturity $28,000.0000
time 36.00
rate 0.00500
PV 23,398.0577
Net present worth:
23,398.06 - 43,000 = 19,601.94
Lease option
PV of the monthly payment:
C 505.00
time 36
rate 0.005
PV $16,599.8632
plus the 4,300 downpayment
present worth: -20.899,86
As the option from the purcahse gives a lower present worth it is preferable over the option to lease the vehicle
X - 43,000 = -20,899.86
X = 22,100.14
We have to look at which resale price the present value is equal to 22,100.14
Principal 22,100.14
time 36.00
rate 0.00500
Nominal 26,446.81
Answer:
The fee is included for the security services that the airport provides.
Explanation:
The basic structure of a air far includes a base price of travel, contingency charges, extra charges for service and various taxed that are levied by the government on the aircraft carriers that use the domestic air space in a country. The sum of all these charges in addition to the profit that the plane carrier charges becomes the base fare of the ticket. In the given condition since an extra fee is imposed on the grounds of security so that the travel becomes secure and safe and hence the extra tax is imposed. This tax is used to meet the charges of security personnel and operating costs of various machines that help in scanning the baggage of the passengers.
Answer:
The preparation is presented below:
Explanation:
The preparation of the stockholder equity section of the balance sheet is presented below:
Common stock $1,900,000
Add: Additional paid in capital $16,100,000
Total paid in capital $18,000,000
Add: Retained earnings $9,100,000
Less: Treasury stock - $902,000
Total stockholders equity $26,198,000
We simply added the additional capital and retained earning and deduct the treasury stock so that the correct value could arrive
