Is rental income A. Cash B. Investment
1 answer:
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Answer:
(i) Option (A) is correct.
(ii) Option (A) is correct.
Explanation:
(i) Marginal revenue refers to the change in total revenue obtained from the sale of an extra unit of a commodity. It is calculated by differentiating total revenue with respect to output. It is shown as:
where,
TR = Total revenue
q = output
(ii) In a perfectly competitive market, price is equal to both average revenue and marginal revenue. Since, firms in a competitive market are not required to reduce the price of their product for selling more number of units. Hence, the average revenue remains the same at all the level of output. That's why average revenue in equal to the price under perfect market conditions.
Therefore, every additional unit of an output is sold at a same price, so the marginal revenue obtained from an extra unit is constant and hence, price is equal to the marginal revenue.
Answer:
12.46%
Explanation:
Data provided:
Amount invested in Stock A = $1,750
Amount invested in stock B = $3,950
Expected rate of return on stock A = 9%
Expected rate of return on stock B = 14%
Thus,
Expected amount of return on stock A
= Amount invested in Stock A × Expected rate of return on stock A
on substituting the respective values, we have
= $1,750 × 0.09 = $157.5
and,
Expected amount of return on stock B
= Amount invested in Stock B × Expected rate of return on stock B
on substituting the respective values, we have
= $3,950 × 0.14 = $553
Therefore, the total expected return from both the stocks = $157.5 + $553
= $710.5
Now,
the total amount invested = $1,750 + $3,950 = $5700
Hence, the expected rate of return on the portfolio
=
on substituting the values, we get
=
the expected rate of return on the portfolio = 12.46%