In a perfectly competitive market bell computers will cause profits to increase by producing one more.
A hypothetical market system is referred to as perfect competition. Perfect competition offers a valuable model for illustrating how supply and demand influence pricing and behaviour in a market economy, despite perfect competition seldom occurring in actual markets.
One of the most efficiently operating markets is one with perfect competition, when a large number of buyers and suppliers cooperate perfectly. Sadly, it is a hypothetical event that does not occur in the real world. But in order to guarantee a fair price for all goods and services, markets should strive to be as similar to this type of market as feasible.
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Answer:
A zero coupon bond:
A. is sold at a large premium.
B. has a price equal to the future value of the face amount given a positive rate of return.
C. can only be issued by the U.S. Treasury.
D. has less interest rate risk than a comparable coupon bond.
E. has a market price that is computed using semiannual compounding of interest.
Answer is : B
Explanation:
In classification of bonds we have a unique type of bond known as Zero-coupon bonds also know as Pure discount bonds, unlike traditional bonds they don’t pay coupon instead they are sold on discount basis and on maturity the bondholder receive a par value, for this reason the price will be at a discount on sale and on maturity be redeemed at par price showing a positive rate of return.
Non price competition is competing against others when price isn't the driving force of differentiation. If a local restaurant repairs a new recipe for it's lunch menu it is using the physical characteristic form of non price competition. The restaurant is hoping to differentiate based on the quality and taste of their new lunch item compared with another restaurants.
Answer:
A and B can go into a swap to gain advantage while still borrow at their desired rate. Details are in the explanation part.
Explanation:
Both A and B will borrow the same amount in the market, in which:
+ A can borrow from outside, floating at LIBOR + 0.5%. Go to a swap with B to receive LIBOR to B and pay fixed rate of 12% on the borrowed amount. So, total interest rate A has to pay is: Libor - (Libor + 0.5%) - 12.0% = -12.5% or 12.5% fixed => A borrowed fixed at 0.5% lower.
+ B can borrow from outside, fixed at 11%. Go to a swap with A to receive fixed rate of 12% and pay Libor to B on the borrowed amount. So, total interest rate B has to pay is: 12% - Libor -11% = -(Libor - 1%) or Libor - 1% floating => B borrowed floating at 2.5% lower.
Answer:
<em><u>The manufacturer of the toaster would argue from the point of view of the warranty offered for the toaster.</u></em> In most electronic products, the manufacturer offers warranty ranging from 1 year to 5 years.
<em>For the toaster to have worked for more than 20 years without any problem shows that it was a good product. And, the warranty must have expired hence the need not to be held responsible for whatever happened to it.</em>
Explanation:
